Real Estate and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2022

Components of Investments in Real Estate

The following table sets forth the components of our investments in real estate as of June 30, 2022 and December 31, 2021, respectively, excluding real estate held for sale as of June 30, 2022 (dollars in thousands):


	June 30, 2022		December 31, 2021
Real estate:
Land (1)	$	149,755	$	149,773
Building and improvements	1,041,189		1,004,362
Tenant improvements	69,478		71,123
Accumulated depreciation	(279,331)		(266,672)
Real estate, net	$	981,091	$	958,586

(1)This amount includes $4,436 of land value subject to land lease agreements which we may purchase at our option for a nominal fee.

Acquisitions

We acquired seven industrial properties during the six months ended June 30, 2022, and two industrial properties during the six months ended June 30, 2021. The acquisitions are summarized below (dollars in thousands):


Six Months Ended		Aggregate Square Footage	Weighted Average Lease Term	Aggregate Purchase Price		Aggregate Capitalized Acquisition Costs
June 30, 2022	(1)	742,303	11.7 years	$	51,919	$	519
June 30, 2021	(2)	205,352	13.5 years	$	19,341	$	216

(1)On February 24, 2022, we acquired an 80,000 square foot property in Wilkesboro, North Carolina for $7.5 million. The property is fully leased to one tenant and had 12.7 years of remaining lease term at the time we acquired the property. On March 11, 2022, we acquired a 56,000 square foot property in Oklahoma City, Oklahoma for $6.0 million. The property is fully leased to one tenant and had 7.0 years of remaining lease term at the time we acquired the property. On May 4, 2022, we acquired a two-property, 260,719 square foot portfolio in Cleveland, Ohio and Fort Payne, Alabama for $19.5 million. The properties are fully leased to one tenant and had 11.4 years of remaining lease term at the time we acquired the properties. On May 12, 2022, we acquired a three-property, 345,584 square foot portfolio in Wilmington, North Carolina for $18.9 million. The properties are fully leased to one tenant and had 13.1 years of remaining lease term at the time we acquired the properties.

(2)On January 22, 2021, we acquired a 180,152 square foot property in Findlay, Ohio for $11.1 million. The property is fully leased to one tenant and had 14.2 years of remaining lease term at the time we acquired the property. On June 17, 2021, we acquired a 25,200 square foot property in Baytown, Texas for $8.2 million. The property is fully leased to one tenant and had 12.6 years of remaining lease term at the time we acquired the property.

Fair Value of Assets Acquired and Liabilities Assumed

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the six months ended June 30, 2022 and 2021, respectively, as follows (dollars in thousands):


	Six Months Ended June 30, 2022			Six Months Ended June 30, 2021
Acquired assets and liabilities	Purchase price			Purchase price
Land	$	3,380		$	1,862
Building	40,855			14,277
Tenant Improvements	768			103
In-place Leases	2,952			1,127
Leasing Costs	2,296			1,153
Customer Relationships	1,932			455
Above Market Leases	319			364
Below Market Leases	(583)		(1)	—


Total Purchase Price	$	51,919		$	19,341

(1)This amount includes $17 of prepaid rent included in Other liabilities on the condensed consolidated balance sheets.

Future Lease Payments From Tenants

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the six months ending December 31, 2022 and each of the five succeeding fiscal years and thereafter is as follows, excluding real estate held for sale as of June 30, 2022 (dollars in thousands):


Year	Tenant Lease Payments
Six Months Ending 2022	$	60,600
2023	113,366
2024	107,440
2025	103,735
2026	95,250
2027	76,953
Thereafter	301,073

Lease Revenue

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the three and six months ended June 30, 2022 and 2021, respectively (dollars in thousands):


	For the three months ended June 30,
	(Dollars in Thousands)
Lease revenue reconciliation	2022		2021		$ Change		% Change
Fixed lease payments	$	31,878	$	29,345	$	2,533	8.6	%
Variable lease payments	4,521		4,026		495		12.3	%
	$	36,399	$	33,371	$	3,028	9.1	%


	For the six months ended June 30,
	(Dollars in Thousands)
Lease revenue reconciliation	2022		2021		$ Change		% Change
Fixed lease payments	$	63,210	$	60,101	$	3,109	5.2	%
Variable lease payments	8,720		7,946		774		9.7	%
	$	71,930	$	68,047	$	3,883	5.7	%

Carrying Value of Intangible Assets and Accumulated Amortization

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of June 30, 2022 and December 31, 2021, respectively, excluding real estate held for sale as of June 30, 2022 (dollars in thousands):


	June 30, 2022				December 31, 2021
	Lease Intangibles		Accumulated Amortization		Lease Intangibles		Accumulated Amortization
In-place leases	$	105,797	$	(63,846)	$	105,891	$	(62,604)
Leasing costs	82,872		(45,407)		81,487		(43,982)
Customer relationships	71,873		(39,586)		71,922		(38,220)
	$	260,542	$	(148,839)	$	259,300	$	(144,806)

	Deferred Rent Receivable/(Liability)		Accumulated (Amortization)/Accretion		Deferred Rent Receivable/(Liability)		Accumulated (Amortization)/Accretion
Above market leases	$	15,706	$	(11,815)	$	15,538	$	(11,520)
Below market leases and deferred revenue	(61,185)		22,694		(48,241)		21,471

Weighted Average Amortization Periods

The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the six months ended June 30, 2022 and 2021, respectively, were as follows:


Intangible Assets & Liabilities	2022	2021
In-place leases	11.6	13.5
Leasing costs	11.6	13.5
Customer relationships	18.9	21.1
Above market leases	12.1	13.5
Below market leases	11.2	0.0
All intangible assets & liabilities	13.3	15.3