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Real Estate Dispositions, Held for Sale and Impairment Charges | 9 Months Ended
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Sep. 30, 2022
Real Estate [Abstract] |
Real Estate Dispositions, Held for Sale and Impairment Charges | Real Estate Dispositions, Held for Sale and Impairment ChargesReal Estate Dispositions During the nine months ended September 30, 2022, we continued to execute our capital recycling program, whereby we sold properties outside of our core markets and redeployed proceeds to either fund property acquisitions in our target, secondary growth markets, or repay outstanding debt. We expect to continue to execute our capital recycling plan and sell non-core properties as reasonable disposition opportunities become available, and use the sales proceeds to acquire properties in our target, secondary growth markets, or pay down outstanding debt. During the nine months ended September 30, 2022, we sold three non-core properties, located in Jupiter, Florida, Parsippany, New Jersey, and Boston Heights, Ohio.
Aggregate Square Footage Sold |  | Aggregate Sales Price |  | Aggregate Sales Costs |  | Aggregate Impairment Charge for the Nine Months Ended September 30, 2022 |  | Aggregate Gain on Sale of Real Estate, net
145,111 |  |  | $ | 28,000 |  |  | $ | 1,153 |  |  | $ | 1,374 |  |  | $ | 8,902 |
Our dispositions during the nine months ended September 30, 2022 were not classified as discontinued operations because they did not represent a strategic shift in operations, nor will such dispositions have a major effect on our operations and financial results. Accordingly, the operating results of these properties are included within continuing operations for all periods reported. The table below summarizes the components of operating income from the real estate and related assets disposed of during the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):
|  | For the three months ended September 30, |  | For the nine months ended September 30,
|  | 2022 |  | 2021 |  | 2022 |  | 2021
Operating revenue |  | $ | 3,505 |  |  | $ | 730 |  |  | $ | 4,961 |  |  | $ | 2,442 |
Operating expense |  | 51 |  |  | 442 |  |  | 2,215 |  |  | 1,506 |
Other income (expense), net |  | 8,902 |  | (1) | (36) |  |  | 8,857 |  | (1) | 42 |
Income from real estate and related assets sold |  | $ | 12,356 |  |  | $ | 252 |  |  | $ | 11,603 |  |  | $ | 978 |
(1)Includes an $8.9 million gain on sale of real estate, net, on three property sales. Real Estate Held for Sale At September 30, 2022, we had two properties classified as held for sale, located in Columbus, Ohio and Allen, Texas. We consider these assets to be non-core to our long term strategy. At December 31, 2021, we did not have any properties classified as held for sale. The table below summarizes the components of the assets and liabilities held for sale at September 30, 2022 reflected on the accompanying condensed consolidated balance sheets (dollars in thousands):
|  | September 30, 2022 |  |
Assets Held for Sale |  |  |  |
Total real estate held for sale |  | $ | 9,979 |  |  |
Lease intangibles, net |  | 680 |  |  |
Deferred rent receivable, net |  | 775 |  |  |
Total Assets Held for Sale |  | $ | 11,434 |  |  |
Liabilities Held for Sale |  |  |  |
Asset retirement obligation |  | $ | 16 |  |  |
Total Liabilities Held for Sale |  | $ | 16 |  |  |
Impairment Charges We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the nine months ended September 30, 2022 and identified one held and used asset, located in Columbia, South Carolina, which was impaired by $10.7 million. In performing our impairment testing, the undiscounted cash flow for this asset was below the carrying value. We engaged a third party expert to determine the fair value for this asset, which was calculated using level 3 inputs. As part of their analysis, a sales comparison approach was used with the value per square foot range between $9.87 per square foot and $55.48 per square foot, with a weighted average of $30.72 per square foot. As a result, we recorded an impairment charge to the carrying value, to record this property at the appraised value of $4.5 million. We evaluated our held for sale assets to determine if any of these assets were impaired during the nine months ended September 30, 2022, and identified one held for sale asset, located in Parsippany, New Jersey, which was impaired by $1.4 million. In performing our held for sale assessment, the carrying value of this asset was above the fair value, less costs of sale. As a result, we impaired this property to equal the fair market value less costs of sale. The property was sold during the nine months ended September 30, 2022. We did not recognize an impairment charge during the nine months ended September 30, 2021. Fair market value for this asset was calculated using Level 3 inputs (defined in Note 6 “Mortgage Notes Payable and Credit Facility”), which were determined using a negotiated sales price from an executed purchase and sale agreement with a third party. We continue to evaluate our properties on a quarterly basis for changes that could create the need to record impairment. Future impairment losses may result, and could be significant, should market conditions deteriorate in the markets in which we hold our assets or should we be unable to secure leases at terms that are favorable to us, which could impact the estimated cash flow of our properties over the period in which we plan to hold our properties. Additionally, changes in management’s decisions to either own and lease long-term or sell a particular asset will have an impact on this analysis.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI https://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI https://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI https://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI https://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI https://asc.fasb.org/topic&trid=2134617 + Details
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