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Real Estate, Real Estate-Related Intangibles and Real Estate Available and Held for Sale

12 Months Ended

Dec. 31, 2024

Real Estate [Abstract]

Real Estate, Real Estate-Related Intangibles and Real Estate Available and Held for Sale

Note 5—Real Estate, Real Estate-Related Intangibles and Real Estate Available and Held for Sale

The Company’s real estate assets consist of the following ($ in thousands):


		As of
		December 31, 2024			December 31, 2023
Land and land improvements, at cost		$	547,739		$	551,105
Buildings and improvements, at cost			193,232			193,232
Less: accumulated depreciation			(46,428)			(40,400)
Total real estate, net		$	694,543		$	703,937
Real estate-related intangible assets, net			208,731			211,113
Real estate available and held for sale			7,233			9,711
Total real estate, net and real estate-related intangible assets, net and real estate available and held for sale		$	910,507		$	924,761

Real estate-related intangible assets, net consist of the following items ($ in thousands):


		As of December 31, 2024
		Gross			Accumulated			Carrying
		Intangible			Amortization			Value
Above-market lease assets, net⁽¹⁾		$	186,002		$	(21,524)		$	164,478
In-place lease assets, net⁽²⁾			69,631			(26,076)			43,555
Other intangible assets, net			750			(52)			698
Total		$	256,383		$	(47,652)		$	208,731


		As of December 31, 2023
		Gross			Accumulated			Carrying
		Intangible			Amortization			Value
Above-market lease assets, net⁽¹⁾		$	186,002		$	(18,388)		$	167,614
In-place lease assets, net⁽²⁾			65,345			(22,551)			42,794
Other intangible assets, net			750			(45)			705
Total		$	252,097		$	(40,984)		$	211,113

(1)

Above-market lease assets are recognized during asset acquisitions when the present value of market rate rental cash flows over the term of a lease is less than the present value of the contractual in-place rental cash flows. Above-market lease assets are amortized over the non-cancelable term of the leases.

(2)

In-place lease assets are recognized during asset acquisitions and are estimated based on the value associated with the costs avoided in originating leases comparable to the acquired in-place leases as well as the value associated with lost rental revenue during the assumed lease-up period. In-place lease assets are amortized over the non-cancelable term of the leases.

The amortization of real estate-related intangible assets had the following impact on the Company’s consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 ($ in thousands):


		Income Statement		For the Years Ended December 31,
Intangible asset		Location		2024			2023			2022
Above-market lease assets (decrease to income)		Operating lease income		$	3,135		$	3,135		$	3,135
In-place lease assets (decrease to income)		Depreciation and amortization			3,526			3,540			3,576
Other intangible assets (decrease to income)		Operating lease income			8			8			8

The estimated expense from the amortization of real estate-related intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands):⁽¹⁾


Year		Amount
2025		$	5,524
2026			3,529
2027			3,529
2028			3,522
2029			3,522

(1)	As of December 31, 2024, the weighted average amortization period for the Company’s real estate-related intangible assets was approximately 81.3 years.

Real estate-related intangible liabilities, net consist of the following items ($ in thousands):


		As of December 31, 2024
		Gross			Accumulated			Carrying
		Intangible			Amortization			Value
Below-market lease liabilities⁽¹⁾		$	68,618		$	(5,696)		$	62,922


		As of December 31, 2023
		Gross			Accumulated			Carrying
		Intangible			Amortization			Value
Below-market lease liabilities⁽¹⁾		$	68,618		$	(4,863)		$	63,755

(1)

Below-market lease liabilities are recognized during asset acquisitions when the present value of market rate rental cash flows over the term of a lease exceeds the present value of the contractual in-place rental cash flows. Below-market lease liabilities are amortized over the non-cancelable term of the leases.

The amortization of real estate-related intangible liabilities had the following impact on the Company’s consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 ($ in thousands):


		Income Statement		For the Years Ended December 31,
Intangible liability		Location		2024			2023			2022
Below-market lease liabilities (increase to income)		Operating lease income		$	833		$	837		$	838

Future Minimum Operating Lease Payments—Future minimum lease payments to be collected under non-cancelable operating leases, excluding lease payments that are not fixed and determinable, in effect as of December 31, 2024, are as follows by year ($ in thousands):


					Fixed Bumps									Fixed
					with									Bumps with
		Inflation-			Inflation			Fixed			Percentage			Percentage
Year		Linked			Adjustments			Bumps			Rent⁽¹⁾			Rent			Total
2025		$	5,807		$	18,004		$	2,313		$	11,889		$	421		$	38,434
2026			5,807			18,370			2,357			7,399			421			34,354
2027			5,807			18,755			2,388			7,399			421			34,770
2028			5,807			19,101			2,421			7,399			304			35,032
2029			5,807			19,453			2,453			7,399			—			35,112
Thereafter			423,318			4,269,555			428,235			28,105			—			5,149,213

(1)	The tenant under a master lease relating to five hotel assets elected to extend the leases underlying three of the five hotels past the initial lease maturity of December 2025.