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Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2023
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | NO TE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements include the consolidated accounts of the Successor Company and the Predecessor Company, as well as entities in which the Successor Company or the Predecessor Company has a controlling financial interest or entities where the Successor Company or the Predecessor Company is deemed to be the primary beneficiary of a VIE. For entities in which the Successor Company or the Predecessor Company has less than a controlling financial interest or entities where the Company is not deemed to be the primary beneficiary of a VIE, the entities are accounted for using the equity method of accounting. Accordingly, the Successor Company's or the Predecessor Company’s share of the net earnings or losses of these entities is included in consolidated net income (loss). The accompanying consolidated financial statements have been prepared in accordance with GAAP. All intercompany transactions have been eliminated. Accounting Guidance Adopted In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform, which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the market transition from LIBOR and other interbank offered rates to alternative reference rates. Additional optional expedients, exceptions and clarifications were created in ASU 2021-01. The guidance was effective upon issuance and generally can be applied to any contract modifications or existing and new hedging relationships through December 31, 2024. The Successor Company elected the expedients in conjunction with transitioning certain debt instruments to alternative benchmark indexes. During the year ended December 31, 2023, there was no impact on the Successor Company's consolidated financial statements at adoption through the use of the expedient. Accounting Guidance Not Yet Adopted On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting, which amends the existing standard's disclosure requirements. Among other things, ASU 2023-07 will require companies to disclose significant segment expenses by reportable segment if they are regularly provided to the Chief Operating Decision Maker ("CODM") and disclosures of the CODM's title and position, as well as details of how the CODM uses the reported measures. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024. The adoption of ASU 2023-07 is not expected to have a material impact on the Successor Company's financial statements. Real Estate Assets The Company capitalizes predevelopment project costs paid to third parties. All previously capitalized predevelopment costs are expensed when it is no longer probable that the project will be completed. Once development of a project commences, all direct costs incurred to construct the project, including interest and real estate taxes, are capitalized. Additionally, certain general and administrative expenses are allocated to the projects and capitalized based on the amount of time applicable personnel work on the development project. Ordinary repairs and maintenance are expensed as incurred. Major replacements and improvements are capitalized and depreciated over their estimated useful lives. All real estate assets acquired prior to and after the Effective Date have been accounted for using the acquisition method of accounting and accordingly, the results of operations are included in the consolidated statements of operations from the respective dates of acquisition. The Company allocates the purchase price to (i) tangible assets, consisting of land, buildings and improvements, as if vacant, and tenant improvements, and (ii) identifiable intangible assets and liabilities, generally consisting of above-market leases, in-place leases and tenant relationships, which are included in intangible lease assets and other assets, and below-market leases, which are included in accounts payable and accrued liabilities. The Company uses estimates of fair value based on estimated cash flows, using appropriate discount rates, and other valuation techniques to allocate the purchase price to the acquired tangible and intangible assets. Liabilities assumed generally consist of mortgage debt on the real estate assets acquired. Assumed debt is recorded at its fair value based on estimated market interest rates at the date of acquisition. The Successor Company expects its future acquisitions will be accounted for as acquisitions of assets in which related transaction costs will be capitalized. Depreciation is computed on a straight-line basis over estimated lives of 30 years for buildings, 10 to 20 years for certain improvements and 5 to 10 years for equipment and fixtures. Tenant improvements are capitalized and depreciated on a straight-line basis over the term of the related lease. Lease-related intangibles from acquisitions of real estate assets are generally amortized over the remaining terms of the related leases. The amortization of above- and below-market leases is recorded as an adjustment to rental revenue, while the amortization of all other lease-related intangibles is recorded as amortization expense. Any difference between the face value of the debt assumed and its fair value is amortized to interest expense over the remaining term of the debt using the effective interest method. The Successor Company’s intangibles and their balance sheet classifications as of December 31, 2023 and 2022, respectively, are summarized as follows:
|  | Successor |
|  | December 31, 2023 |  |  | December 31, 2022 |
|  | Cost |  |  | Accumulated Amortization |  |  | Cost |  |  | Accumulated Amortization |
Above-market leases |  | $ | 232,638 |  |  | $ | (113,965 | ) |  | $ | 241,048 |  |  | $ | (69,783 | )
In-place leases |  |  | 372,596 |  |  |  | (214,957 | ) |  |  | 396,515 |  |  |  | (149,018 | )
Intangible lease assets and other assets: |  |  |  |  |  |  |  |  |  |  |  |
Tenant relationships |  |  | 2,578 |  |  |  | (63 | ) |  |  | 2,523 |  |  |  | (12 | )
Below-market leases |  |  | 145,406 |  |  |  | (64,998 | ) |  |  | 153,273 |  |  |  | (42,657 | )
These intangibles are related to specific tenant leases. Should a termination occur earlier than the date indicated in the lease, the related unamortized intangible assets or liabilities, if any, related to the lease are recorded as expense or income, as applicable. The total net amortization expense of the above intangibles for the Successor Company for the years ended December 31, 2023 and 2022, was $105,964 and $152,174, respectively. The total net amortization expense of the above intangibles for the Successor Company for the period from November 1, 2021 through December 21, 2021 was $32,164. The total net amortization expense of the above intangibles for the Predecessor Company for the period from January 1, 2021 through October 31, 2021 was $1,195. The estimated total net amortization expense for the next five succeeding years is $66,296 in 2024, $44,015 in 2025, $28,400 in 2026, $18,113 in 2027 and $12,135 in 2028. The Successor Company capitalized interest expense of $453, $618 and $216 for the years ended December 31, 2023 and 2022 and the period from November 1, 2021 through December 31, 2021, respectively. The Predecessor Company did no t capitalize interest expense during the period from January 1, 2021 through October 31, 2021. Accounts Receivable Receivables include amounts billed and currently due from tenants pursuant to lease agreements and receivables attributable to straight-line rents associated with those lease agreements. Individual leases where the collection of rents is in dispute are assessed for collectability based on management’s best estimate of collection considering the anticipated outcome of the dispute. Individual leases that are not in dispute are assessed for collectability and upon the determination that the collection of rents over the remaining lease term is not probable, accounts receivable is reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, management assesses whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical collection levels and current economic trends. An allowance for the uncollectable portion of the portfolio is recorded as an adjustment to rental revenues. Management’s collection assessment took into consideration the type of retailer, billing disputes, lease negotiation status and executed deferral or abatement agreements, as well as recent rent collection experience and tenant bankruptcies based on the best information available to management at the time of evaluation. For the Successor year ended December 31, 2023, the Successor Company recorded $1,647 related to uncollectable revenues, which includes the write-off of $346 for straight line rent receivables. For th e Successor year ended December 31, 2022, t here was a reversal of $4,463 related to uncollectable revenues, which includes the write-off of $102 for straight line ren t receivables. For the period November 1, 2021 through December 31, 2021, the Successor Company recorded $1,008 associated with uncollectable revenues, which includes the write-off of $1,717 for straight line rent receivables. For the period from January 1, 2021 through October 31, 2021 the Predecessor Company recorded $5,692 associated with uncollectable revenues, which includes the write-off of $2,806 for straight line rent receivables. Carrying Value of Long-Lived Assets The Company monitors events or changes in circumstances that could indicate the carrying value of a long-lived asset may not be recoverable. The Company uses significant judgement in assessing events or circumstances which might indicate impairment, including but not limited to, changes in management’s intent to hold a long-lived asset over its previously estimated useful life. Changes in management’s intent to hold a long-lived asset have a significant impact on the estimated undiscounted cash flows expected to result from the use and eventual disposition of a long-lived asset and whether a potential impairment loss shall be measured. When indicators of potential impairment are present that suggest that the carrying amounts of a long-lived asset may not be recoverable, the Company assesses the recoverability of the asset by determining whether the asset’s carrying value will be recovered through the estimated undiscounted future cash flows expected from the Company’s use and its eventual disposition. In the event that such undiscounted future cash flows do not exceed the carrying value, the Company adjusts the carrying value of the long-lived asset to its estimated fair value and recognizes an impairment loss. The estimated fair value is calculated based on the following information, in order of preference, depending upon availability: (Level 1) recently quoted market prices, (Level 2) market prices for comparable properties, or (Level 3) the present value of future cash flows, including estimated salvage value. Certain of the Company’s long-lived assets may be carried at more than an amount that could be realized in a current disposition transaction. The Company estimates future operating cash flows, the terminal capitalization rate and the discount rate, among other factors. As these assumptions are subject to economic and market uncertainties, they are difficult to predict and are subject to future events that may alter the assumptions used or management’s estimates of future possible outcomes. Therefore, the future cash flows estimated in the Company’s impairment analyses may not be achieved. See Note 15 for information related to the impairment of long-lived assets in 2023, 2022 and 2021. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less as cash equivalents. Restricted Cash As of December 3 1, 2023 and 2022, restricted cash was related to cash held in escrow accounts for insurance, real estate taxes, capital expenditures and tenant allowances as required by the terms of certain mortgage notes payable, as well as amounts related to cash management agreements with the Company’s lenders that are designated for debt service and operating expense obligations. As of December 31, 2023 and 2022, restricted cash was also related to properties that secure the corporate term loan and the open-air centers and outparcels loan of which we may receive a portion via distributions semiannually and quarterly in accordance with the provisions of the term loan and the open-air centers and outparcels loan, respectively. Investments in Unconsolidated Affiliates The Company evaluates its joint venture arrangements to determine whether they should be recorded on a consolidated basis. The percentage of ownership interest in the joint venture, an evaluation of control and whether a VIE exists are all considered in the Company’s consolidation assessment. Initial investments in joint ventures that are in economic substance a capital contribution to the joint venture are recorded in an amount equal to the cash contributed by the Company and the fair value of any real estate contributed. Initial investments in joint ventures that are in economic substance the sale of a portion of the Company’s interest in the real estate are accounted for as a contribution of real estate recorded in an amount equal to the fair value of the ownership interest retained and as a sale of real estate with profit recognized to the extent of the other joint venture partners’ interests in the joint venture. Profit recognition assumes the Company has no commitment to reinvest with respect to the percentage of the real estate sold and the accounting requirements of the full accrual method are met. The Company accounts for its investment in joint ventures where it owns a noncontrolling interest or where it is not the primary beneficiary of a VIE using the equity method of accounting. Under the equity method, the Company’s cost of investment is adjusted for additional contributions to and distributions from the unconsolidated affiliate, as well as its share of equity in the earnings of the unconsolidated affiliate. Generally, distributions of cash flows from operations and capital events are first made to partners to pay cumulative unpaid preferences on unreturned capital balances and then to the partners in accordance with the terms of the joint venture agreements. On a periodic basis, the Company assesses whether there are any indicators that the fair value of the Company's investments in unconsolidated affiliates may be impaired. An investment is impaired only if the Company’s estimate of the fair value of the investment is less than the carrying value of the investment and such decline in value is deemed to be other than temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over the estimated fair value of the investment. The Company's estimates of fair value for each investment are based on a number of assumptions that are subject to economic and market uncertainties including, but not limited to, demand for space, competition for tenants, changes in market rental rates, and operating costs. As these factors are difficult to predict and are subject to future events that may alter the Company’s assumptions, the fair values estimated in the impairment analyses may not be realized. No impairment charges were recorded for the Successor years ended December 31, 2023 and 2022. Additionally, no impairment charges were recorded for the period from November 1, 2021 through December 31, 2 021 (Successor) or for the period from January 1, 2021 through October 31, 2021 (Predecessor). Deferred Financing Costs Unamortized financing costs of $13,221 and $17,101 for the Successor Company were included in mortgage and other indebtedness, net, at December 31, 2023 and 2022, respectively. Deferred financing costs include fees and costs incurred to obtain financing and are amortized on a straight-line basis to interest expense over the terms of the related indebtedness. Amortization expense related to deferred financing costs for the Successor Company for the years ended December 31, 2023 and 2022 and for the period November 1, 2021 through December 31, 2021 was $4,572, $2,744 and $51, respectively. Amortization expense related to deferred financing costs for the Predecessor Company for the period from January 1, 2021 through October 31, 2021 was $814. Accumulated amortization of deferred financing costs was $7,180 and $2,733 for the Successor Company as of December 31, 2023 and 2022, respectively. See Note 19 for information regarding unamortized financing costs of the Predecessor that were charged to expense in connection with Fresh Start Accounting. Revenue Recognition See Note 3 and Note 4 for a description of the Company's revenue streams. Gain on Sales of Real Estate Assets Gains on the sale of real estate assets, like all non-lease related revenue, are subject to a five-step model requiring that the Company identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue upon satisfaction of the performance obligations. In circumstances where the Company contracts to sell a property with material post-sale involvement, such involvement must be accounted for as a separate performance obligation in the contract and a portion of the sales price allocated to each performance obligation. When the post-sale involvement performance obligation is satisfied, the portion of the sales price allocated to it will be recognized as gain on sale of real estate assets. Property dispositions with no continuing involvement will continue to be recognized upon closing of the sale. Income Taxes The Company is qualified as a REIT under the provisions of the Internal Revenue Code. To maintain qualification as a REIT, the Company is required to distribute at least 90% of its taxable income to shareholders and meet certain other requirements. As a REIT, the Company is generally not liable for federal corporate income taxes. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal and state income taxes on its taxable income at regular corporate tax rates. Even if the Company maintains its qualification as a REIT, the Company may be subject to certain state and local taxes on its income and propert y, and to federal income and excise taxes on its undistributed income. For the years ended December 31, 2023 and 2022 and for the period November 1, 2021 through December 31, 2021, the Successor Company had state tax expense of $823, $1,631 and $142, respectively. State tax expense for the Predecessor Company was $2,992 during the period from January 1, 2021 through October 31, 2021. The Company has also elected taxable REIT subsidiary status for some of its subsidiaries. This enables the Company to receive income and provide services that would otherwise be impermissible for REITs. For these entities, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset may not be realized. An increase or decrease in the valuation allowance that results from the change in circumstances that causes a change in the Company’s judgment about the realizability of the related deferred tax asset is included in income or expense, as applicable. The Successor and Predecessor Company recorded an income tax (provision) benefit as follows:
|  | Successor |  |  |  | Predecessor |
|  | Year Ended December 31, |  |  | Period from November 1, through December 31, |  |  |  | Period from January 1, through October 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |  |  |  | 2021 |
Current tax provision |  | $ | (2,177 | ) |  | $ | (1,951 | ) |  | $ | (4,968 | ) |  |  | $ | (1,078 | )
Deferred tax benefit (provision) |  |  | 1,283 |  |  |  | (1,128 | ) |  |  | 10,853 |  |  |  |  | — |
Income tax (provision) benefit |  | $ | (894 | ) |  | $ | (3,079 | ) |  | $ | 5,885 |  |  |  | $ | (1,078 | )
The Successor Company had a net deferred tax ass et of $10,958 and $9,726 at December 31, 2023 and 2022, respectively, which is included in intangible lease assets and other assets. As of December 31, 2023, tax years that generally remain subject to examination by the Company’s major tax jurisdictions include 2023, 2022, 2021 and 2020. The Company reports any income tax penalties attributable to its properties as property operating expenses and any corporate-related income tax penalties as general and administrative expenses in its consolidated statements of operations. In addition, any interest incurred on tax assessments is reported as interest expense. The Successor Company incurred nominal interest and penalty amounts during the years ended December 31, 2023 and 2022 and for the period from November 1, 2021 through December 31, 2021. The Predecessor Company incurred nominal interest and penalty amounts during the period from January 1, 2021 through October 31, 2021. Concentration of Credit Risk The Company’s tenants include national, regional and local retailers. Financial instruments that subject the Company to concentrations of credit risk consist primarily of tenant receivables. The Company generally does not obtain collateral or other security to support financial instruments subject to credit risk, but it monitors the credit standing of tenants. The Company derives a substantial portion of its rental income from various national and regional retail companies; however, no single tenant collectively accounted for more than 5.0% of the Successor Company’s revenues for the year ended December 31, 2023. Earnings per Share Earnings per share ("EPS") is calculated under the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock and participating securities. The Company grants restricted stock awards to certain employees under its share-based compensation program, which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested restricted stock awards meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends. Diluted EPS incorporates the potential impact of contingently issuable shares. Diluted EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. Performance stock units ("PSUs") and unvested restricted stock awards are contingently issuable common shares and are included in diluted EPS if the effect is dilutive. See Note 16 for a description of the long-term incentive program that these units relate to. The following table presents the calculation of basic and diluted EPS (in thousands, except per share amounts):
|  | Successor |  |  |  | Predecessor |
|  | Year Ended December 31, |  |  | Period from November 1, through December 31, |  |  |  | Period from January 1, through October 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |  |  |  | 2021 |
Basic earnings per share |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to the Company |  | $ | 6,546 |  |  | $ | (93,482 | ) |  | $ | (151,545 | ) |  |  | $ | (470,627 | )
Less: Dividends allocable to unvested restricted stock |  |  | (1,113 | ) |  |  | (2,537 | ) |  |  | — |  |  |  |  | — |
Net income (loss) attributable to common shareholders |  | $ | 5,433 |  |  | $ | (96,019 | ) |  | $ | (151,545 | ) |  |  | $ | (470,627 | )
Weighted-average basic shares outstanding |  |  | 31,303 |  |  |  | 30,046 |  |  |  | 20,208 |  |  |  |  | 196,591 |
Net income (loss) per share attributable to common shareholders |  | $ | 0.17 |  |  | $ | (3.20 | ) |  | $ | (7.50 | ) |  |  | $ | (2.39 | )
Diluted earnings per share (1) |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) attributable to common shareholders |  | $ | 5,433 |  |  | $ | (96,019 | ) |  | $ | (151,545 | ) |  |  | $ | (470,627 | )
Weighted-average basic shares outstanding |  |  | 31,303 |  |  |  | 30,046 |  |  |  | 20,208 |  |  |  |  | 196,591 |
Net income (loss) per share attributable to common shareholders |  | $ | 0.17 |  |  | $ | (3.20 | ) |  | $ | (7.50 | ) |  |  | $ | (2.39 | )
(1) For the Successor year ended December 31, 2023, the computation of diluted EPS does not include contingently issuable shares due to their anti-dilutive nature. Had the contingently issuable shares been dilutive, the denominator for diluted EPS would have been 31,330,597, including 27,434 contingently issuable shares related to unvested restricted stock awards. Due to a net loss for the Successor year ended December 31, 2022, the computation of diluted EPS does not include contingently issuable shares due to their anti-dilutive nature. Had the Successor reported net income for the year ended December 31, 2022, the denominator for diluted EPS would have been 30,206,521, including 160,098 contingently issuable shares related to PSUs and unvested restricted stock awards. There were no potential dilutive common shares and there were no anti-dilutive shares for the Successor period from November 1, 2021 through December 31, 2021. There were no potential dilutive common shares and there were no anti-dilutive shares for the Predecessor period from January 1, 2021 through October 31, 2021. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

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