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REAL ESTATE AND RELATED LEASE INTANGIBLES, NET (Tables)
 3 Months Ended
Mar. 31, 2019
Real Estate [Abstract]  
Schedule of real estate properties by category
The following tables present additional detail related to our real estate portfolio, net, including foreclosed properties ($ in thousands):

 
March 31, 2019
 
December 31, 2018
 
 
 
 
Land
$
198,926

 
$
195,644

Building
830,355

 
814,314

In-place leases and other intangibles
162,413

 
162,002

Less: Accumulated depreciation and amortization
(184,347
)
 
(173,938
)
Less: Impairment(1)
(1,350
)
 
—

Real estate and related lease intangibles, net
$
1,005,997

 
$
998,022

 
 
 
 
Below market lease intangibles, net (other liabilities)
$
(39,922
)
 
$
(40,367
)

 
(1)
As more fully discussed in this Note below, the Company recorded a $1.4 million impairment of real estate during the three months ended March 31, 2019.
Schedule of depreciation and amortization expense recorded
The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):
 
Three Months Ended March 31,
 
2019
 
2018
 
 
 
 
Depreciation expense (1)
$
7,685

 
$
7,786

Amortization expense
2,517

 
3,018

Total real estate depreciation and amortization expense
$
10,202

 
$
10,804

 
(1)
Depreciation expense on the consolidated statements of income also includes $25 thousand and $19 thousand of depreciation on corporate fixed assets for the three months ended March 31, 2019 and 2018, respectively.
Schedule of expected amortization expense related to the acquired in-place lease intangibles, for property owned
The following table presents expected adjustment to operating lease income and expected amortization expense during the next five years and thereafter related to the above and below market leases and acquired in-place lease and other intangibles for property owned as of March 31, 2019 ($ in thousands):
Period Ending December 31,
 
Adjustment to Operating Lease Income
 
Amortization Expense
 
 
 
 
 
2019 (last 9 months)
 
$
743

 
$
5,036

2020
 
746

 
6,556

2021
 
746

 
6,490

2022
 
751

 
6,427

2023
 
751

 
6,304

Thereafter
 
31,136

 
65,633

Total
 
$
34,873

 
$
96,446
Schedule of contractual future minimum rent under leases
The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases) at March 31, 2019 ($ in thousands):
 
Period Ending December 31,
 
Amount
 
 
 
2019 (last 9 months)
 
$
62,728

2020
 
71,870

2021
 
68,303

2022
 
64,590

2023
 
62,421

Thereafter
 
509,455

Total
 
$
839,367
Schedule of real estate properties acquired
The purchase prices were allocated to the asset acquisitions during the three months ended March 31, 2018, as follows ($ in thousands):
 
 
Purchase Price Allocation
 
 
 
Land
 
$
2,939

Building
 
21,527

Intangibles
 
—

Below Market Lease Intangibles
 
—

Total purchase price
 
$
24,466


The Company recorded no revenues from its 2018 acquisition for the three months ended March 31, 2018. The Company recorded $(0.2) million in earnings (losses) from its 2018 acquisition for the three months ended March 31, 2018, which is included in its consolidated statements of income.

During the three months ended March 31, 2019, the Company acquired the following properties ($ in thousands):

Acquisition Date
 
Type
 
Primary Location(s)
 
Purchase Price/Fair Value on the Date of Foreclosure
 
Ownership Interest (1)
 
 
 
 
 
 
 
 
 
Purchases of real estate
 
 
 
 
 
 
February 2019
 
Net Lease
 
Houghton Lake, MI
 
$
1,242

 
100.0%
February 2019
 
Net Lease
 
Trenton, MO
 
1,164

 
100.0%
Total purchases of real estate
 
 
 
$
2,406

 
 
 
 
 
 
 
 
 
 
 
Real estate acquired via foreclosure
 
 
 
 
February 2019
 
Diversified
 
Omaha, NE
 
18,200

 
100.0%
Total real estate acquired via foreclosure
 
$
18,200

 
 
 
 
 
 
 
 
 
 
 
Total real estate acquisitions
 
 
 
$
20,606

 
 
 
(1)
Properties were consolidated as of acquisition date.
 
During the three months ended March 31, 2019, the Company acquired title to real estate in a foreclosure. The real estate had a fair value of $18.2 million and previously served as collateral for a mortgage loan receivable held for investment, which was previously on non-accrual status. This loan had an amortized cost of $17.8 million, accrued interest of $0.2 million and an unamortized discount of $0.1 million. The acquisition was accounted for in real estate, net, at fair value on the date of foreclosure. There was no gain or loss resulting from the disposition of the loan.

On October 1, 2016, the Company early adopted ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). As a result of this adoption, acquisitions of real estate may not meet the revised definition of a business and may be treated as asset acquisitions rather than business combinations. The measurement of assets and liabilities acquired will no longer be recorded at fair value and the Company will now allocate purchase consideration based on relative fair values. Real estate acquisition costs, which are no longer expensed as incurred, will be capitalized as a component of the cost of the assets acquired. During the three months ended March 31, 2019, all acquisitions were determined to be asset acquisitions.

The purchase prices were allocated to the asset acquisitions during the three months ended March 31, 2019, as follows ($ in thousands):
 
 
Purchase Price Allocation
 
 
 
Land
 
$
3,483

Building
 
16,804

Intangibles
 
442

Below Market Lease Intangibles
 
(123
)
Total purchase price
 
$
20,606


The weighted average amortization period for intangible assets acquired during the three months ended March 31, 2019 was 36.7 months. The Company recorded $16 thousand in revenues from its 2019 acquisitions for the three months ended March 31, 2019, which is included in its consolidated statements of income. The Company recorded $0.2 million in earnings (losses) from its 2019 acquisitions for the three months ended March 31, 2019, which is included in its consolidated statements of income.

During the three months ended March 31, 2018, the Company acquired the following properties ($ in thousands):

Acquisition Date
 
Type
 
Primary Location(s)
 
Purchase Price
 
Ownership Interest (1)
 
 
 
 
 
 
 
 
 
March 2018
 
Diversified(2)
 
Lithia Springs, GA
 
$
24,466

 
70.6%
Total real estate acquisitions
 
 
 
$
24,466

 
 
 
(1)
Properties were consolidated as of acquisition date.
(2)
Joint venture partner contributed $2.9 million to the partnership.
Schedule of properties sold
The Company sold the following properties during the three months ended March 31, 2019 ($ in thousands):

Sales Date
 
Type
 
Primary Location(s)
 
Net Sales Proceeds
 
Net Book Value
 
Realized Gain/(Loss)
 
Properties
 
Units Sold
 
Units Remaining
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Various
 
Condominium
 
Las Vegas, NV
 
$
—

 
$
—

 
$
—

 
—

 
—

 
1

Various
 
Condominium
 
Miami, FL
 
1,688

 
1,503

 
185

 
—

 
6

 
16

Totals
 
 
 
 
 
$
1,688

 
$
1,503

 
$
185

 
 
 
 
 
 

The Company sold the following properties during the three months ended March 31, 2018 ($ in thousands):

Sales Date
 
Type
 
Primary Location(s)
 
Net Sales Proceeds
 
Net Book Value
 
Realized Gain/(Loss)
 
Properties
 
Units Sold
 
Units Remaining
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Various
 
Condominium
 
Las Vegas, NV
 
$
1,811

 
$
732

 
$
1,079

 
—

 
2

 
11

Various
 
Condominium
 
Miami, FL
 
2,263

 
1,792

 
471

 
—

 
8

 
40

March 2018
 
Diversified
 
El Monte, CA
 
71,807

 
52,610

 
19,197

(1)
1

 
—

 
—

March 2018
 
Diversified
 
Richmond, VA
 
20,966

 
11,370

 
9,596

(2)
1

 
—

 
—

Totals
 
 
 
 
 
$
96,847

 
$
66,504

 
$
30,343

 
 
 
 
 
 
 
 
(1)
This property had a third party investor. The third party investor has been allocated $7.0 million of the realized gain, which is included in net (income) loss attributable to noncontrolling interest in consolidated joint ventures, for the three months ended March 31, 2018, on the consolidated statements of income.
(2)
This property had a third party investor. The third party investor has been allocated $0.4 million of the realized gain, which is included in net (income) loss attributable to noncontrolling interest in consolidated joint ventures, for the three months ended March 31, 2018, on the consolidated statements of income.