Real Estate

6 Months Ended

Jun. 30, 2023

5. Real Estate

The following table summarizes the Company's real estate held for investment by subsidiaries in the Operating segment.


(In thousands)	June 30, 2023		December 31, 2022
Land	$	266,148	$	257,588
Buildings and improvements	1,892,008		1,573,605

Data center infrastructure	4,556,328		4,427,150


Construction in progress	377,103		395,393
	7,091,587		6,653,736
Less: Accumulated depreciation	(913,120)		(732,438)
Real estate assets, net	$	6,178,467	$	5,921,298

Real Estate Depreciation

Depreciation of real estate held for investment was $94.3 million and $87.3 million for the three months ended June 30, 2023 and 2022, respectively, and $186.7 million and $166.4 million for the six months ended June 30, 2023 and 2022.

Property Operating Income

Components of property operating income are as follows.


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2023		2022		2023		2022
Lease income:
Fixed lease income	$	178,536	$	181,188	$	355,956	$	341,512
Variable lease income	34,708		33,368		67,690		57,215
	213,244		214,556		423,646		398,727
Data center service revenue	20,193		19,642		39,998		37,978
Other property operating income	1,316		53		2,036		57
	$	234,753	$	234,251	$	465,680	$	436,762

For the six months ended June 30, 2023 and 2022, property operating income from a single customer accounted for approximately 16% and 15%, respectively, of the Company's total revenues from continuing operations, or approximately 6% and 7%, respectively, of the Company's share of total revenues from continuing operations, net of amounts attributable to noncontrolling interests in investment entities.

Commitment for Tenant Allowance

In connection with DataBank’s acquisition of a data center portfolio in March 2022 (Note 3), DataBank and the seller concurrently entered into a master lease agreement which provides that the seller leases from DataBank land acquired in the transaction. If the seller does not exercise its rights to early terminate the lease, the seller is obligated to develop a data center facility on a portion of the acquired land and DataBank is committed to provide the seller a tenant allowance of up to $37.5 million to finance the construction. In December 2022, the seller waived its right to terminate the lease with respect to the portion of the land subject to development. The seller will be responsible for undertaking the construction and any resulting overages. Title to the to-be constructed building, improvements and fixtures will be vested in the seller for the duration of the lease and transfers to DataBank thereafter. The timing of funding of DataBank’s commitment to the seller will be based on agreed upon milestones, with construction to be completed no later than January 1, 2026. DataBank expects to fund its commitment through future debt drawdowns. To-date, DataBank has funded $9.4 million.