Real Estate Investments

3 Months Ended

Mar. 31, 2024

As of March 31, 2024, the Company owned or had investments in 628 properties, excluding 16 property developments where rent has yet to commence. The gross real estate investment portfolio, including properties under development, totaled approximately $1.9 billion and consisted of the gross acquisition cost of land, buildings, improvements, lease intangible assets and liabilities, and property development costs. The investment portfolio is geographically dispersed throughout 45 states with gross real estate investments in Illinois and Texas representing 9.4% and 8.8%, respectively, of the total gross real estate investment of the Company’s investment portfolio.

Acquisitions

During the three months ended March 31, 2024, the Company acquired 28 properties for a total purchase price of $95.2 million, inclusive of $1.2 million of capitalized acquisition costs.

During the three months ended March 31, 2023, the Company acquired 20 properties for a total purchase price of $67.7 million, inclusive of $0.7 million of capitalized acquisition costs.

The acquisitions were all accounted for as asset acquisitions. An allocation of the purchase price and acquisition costs paid for the completed acquisitions is as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Land	$	16,608	$	14,304
Buildings	59,379		43,133
Site improvements	6,428		3,479
Tenant improvements	1,445		391
In-place lease intangible assets	11,293		6,410





Purchase price (including acquisition costs)	$	95,153	$	67,717

Development

As of March 31, 2024, the Company had 13 property developments under construction. During the three months ended March 31, 2024, the Company invested $11.0 million in property developments, including the land acquisition of two new developments with a combined initial purchase price of $0.8 million. During the three months ended March 31, 2024, the Company completed development on seven projects and reclassified approximately $18.4 million from property under development to land, buildings and improvements, and other assets (leasing commissions) in the accompanying condensed consolidated balance sheets. Rent commenced for four of the seven completed developments in the first quarter of 2024, while rent is expected to commence for the other three completed developments in the second quarter of 2024. The remaining 13 developments are expected to be substantially completed with rent commencing at various points throughout 2024. The purchase price, including acquisition costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of March 31, 2024.

During the three months ended March 31, 2023, the Company invested $4.5 million in property developments. During the three months ended March 31, 2023, the Company completed development on two projects and reclassified approximately $14.8 million from property under development to land, buildings and improvements in the accompanying condensed consolidated balance sheets. Rent commenced for the completed developments in the first quarter of 2023. The purchase price, including acquisitions costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of March 31, 2023.

Additionally, during the three months ended March 31, 2024 and 2023, the Company capitalized approximately $0.4 million and $0.1 million, respectively, of interest expense associated with properties under development.

Dispositions

During the three months ended March 31, 2024, the Company sold 12 properties for a total sales price, net of disposal costs, of $20.5 million, recognizing a net gain of $1.0 million.

During the three months ended March 31, 2023, the Company sold eight properties for a total sales price, net of disposal costs, of $15.5 million, recognizing a net loss of $0.3 million.

Investment in Mortgage Loans Receivable

The Company’s mortgage loans receivable portfolio as of March 31, 2024 and December 31, 2023 is summarized below (in thousands):


Loan Type	Monthly Payment (1)	Number of Secured Properties	Effective Interest Rate (2)	Stated Interest Rate	Maturity Date	March 31, 2024		December 31, 2023
Mortgage (3) (4) (5)	I/O	1	6.74%	7.00%	4/8/2024	$	43,612	$	43,612
Mortgage (4)	I/O	46	9.55%	9.55%	3/10/2026	41,940		41,940
Mortgage (4) (6)	I/O	3	8.10%	6.89%	4/10/2026	4,132		4,132
Mortgage (3) (4) (6)	I/O	9	7.59%	7.59%	6/10/2025	14,023		14,024
Mortgage	None (7)	1	8.50%	8.50%	12/29/2024	660		660
Mortgage (3)	P+I	1	7.50%	7.50%	1/8/2025	3,239		3,246
Mortgage (3) (4) (8)	I/O	11	10.22%	10.25%	3/19/2025	14,209		5,007
Mortgage (3) (4)	I/O	2	10.25%	10.25%	12/22/2024	2,915		1,909
Total						124,730		114,530
Unamortized loan origination costs and fees, net						(10)		58
Unamortized discount						(103)		(116)
Total mortgage loans receivable, net						$	124,617	$	114,472

(1) I/O: Interest Only; P+I: Principal and Interest.

(2) Includes amortization of discount and loan origination costs, as applicable.

(3) The Company has the right, subject to certain terms and conditions, to acquire all or a portion of the underlying collateralized properties.

(4) Loans require monthly payments of interest only with principal payments occurring as borrower disposes of underlying properties, limited to the Company’s allocated investment by property. Any remaining principal balance will be repaid at or before the maturity date.

(5) The $43.6 million mortgage note receivable was scheduled to mature on April 8, 2024, however, the Company executed an amendment in April 2024 that extended the maturity date to January 8, 2025.

(6) The stated interest rate is variable up to 15.0% and is calculated based on contractual rent for existing collateralized properties subject to the loan agreement.

(7) Payments of both interest and principal are due at maturity.

(8) The collateralized properties are in process developments with varying maturity dates dependent upon initial funding. Maturity dates range from December 5, 2024 to March 19, 2025.

Assets Held for Sale

As of March 31, 2024 and December 31, 2023, there were 23 properties classified as held for sale.

Provisions for Impairment

The Company recorded provisions for impairment of $3.7 million on 12 properties for the three months ended March 31, 2024. The Company recorded no provisions for impairment for the three months ended March 31, 2023.