Real Estate

3 Months Ended

Mar. 31, 2021

The Company's real estate assets were comprised of the following ($ in thousands):


	Net Lease(1)		Operating Properties		Total
As of March 31, 2021
Land, at cost	$	188,418	$	103,530	$	291,948
Buildings and improvements, at cost	1,354,952		106,478		1,461,430
Less: accumulated depreciation	(260,288)		(18,697)		(278,985)
Real estate, net(1)	1,283,082		191,311		1,474,393
Real estate available and held for sale(2)	—		2,600		2,600
Total real estate	$	1,283,082	$	193,911	$	1,476,993
As of December 31, 2020
Land, at cost	$	188,418	$	103,530	$	291,948
Buildings and improvements, at cost	1,353,683		106,422		1,460,105
Less: accumulated depreciation	(250,198)		(17,574)		(267,772)
Real estate, net(1)	1,291,903		192,378		1,484,281
Real estate available and held for sale(2)	—		5,212		5,212
Total real estate	$	1,291,903	$	197,590	$	1,489,493

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(1)As of March 31, 2021 and December 31, 2020, real estate, net included $751.4 million and $755.5 million, respectively, of real estate of the Net Lease Venture (refer to Net Lease Venture below).

(2)As of March 31, 2021 and December 31, 2020, the Company had $2.6 million and $5.2 million, respectively, of residential condominiums available for sale in its operating properties portfolio.

Net Lease Venture—In February 2014, the Company partnered with a sovereign wealth fund to form a venture to acquire and develop net lease assets (the "Net Lease Venture") and gave a right of first offer to the venture on all new net lease investments. The Company and its partner had joint decision making rights pertaining to the acquisition of new investments. Upon the expiration of the investment period on June 30, 2018, the Company obtained control of the venture through its unilateral rights of management and disposition of the assets. As a result, the expiration of the investment period resulted in a reconsideration event under GAAP and the Company determined that the Net Lease Venture is a VIE for which the Company is the primary beneficiary. Effective June 30, 2018, the Company consolidated the Net Lease Venture as an asset acquisition under ASC 810. The Net Lease Venture had previously been accounted for as an equity method investment. The Company has an equity interest in the Net Lease Venture of approximately 51.9%. The Company is responsible for sourcing new opportunities and managing the venture and its assets in exchange for a management fee and incentive fee. Several of the Company's senior executives whose time is substantially devoted to the Net Lease Venture own a total of 0.6% equity ownership in the venture via co-investment. These senior executives are also entitled to an amount equal to 50% of any incentive fee received based on the 47.5% external partner's interest.

Dispositions—During the three months ended March 31, 2020, the Company sold a net lease asset for net proceeds of $7.5 million and recognized an impairment of $1.7 million in connection with the sale.

Real Estate Available and Held for Sale—During the three months ended March 31, 2020, the Company transferred a net lease asset with an aggregate carrying value of $25.7 million to held for sale due to an executed contract with SAFE. The net lease asset was sold to SAFE in September 2020.

Impairments—During the three months ended March 31, 2020, the Company recorded an impairment of $1.7 million in connection with the sale of a net lease asset.

Tenant Reimbursements—The Company receives reimbursements from tenants for certain facility operating expenses including common area costs, insurance, utilities and real estate taxes. Tenant expense reimbursements were $7.0 million and $5.9 million for the three months ended March 31, 2021 and 2020, respectively. These amounts are included in "Operating lease income" in the Company's consolidated statements of operations.

Allowance for Doubtful Accounts—As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts related to real estate tenant receivables was $1.0 million and $1.7 million, respectively. These amounts are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets.

Future Minimum Operating Lease Payments—Future minimum operating lease payments to be collected under non-cancelable operating leases, excluding customer reimbursements of expenses, in effect as of March 31, 2021, are as follows by year ($ in thousands):


Year	Net Lease		Operating Properties
2021 (remaining nine months)	$	95,970	$	10,877
2022	130,077		6,677
2023	121,718		6,421
2024	116,027		6,383
2025	119,483		5,720
Thereafter	1,254,867		8,247