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Real Estate Dispositions, Held for Sale, and Impairment Charges | 12 Months Ended
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Dec. 31, 2023
Real Estate [Abstract] |
Real Estate Dispositions, Held for Sale, and Impairment Charges | Real Estate Dispositions, Held for Sale, and Impairment Charges Real Estate Dispositions During the year ended December 31, 2023, 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. During the year ended December 31, 2023, we sold seven non-core properties, located in Baytown, Texas; Birmingham, Alabama; Pittsburgh, Pennsylvania; Eatontown, New Jersey; Taylorsville, Utah; Columbia, South Carolina; and Blaine, Minnesota, which are summarized in the table below (dollars in thousands):
Aggregate Square Footage Sold |  | Aggregate Sales Price |  | Aggregate Sales Costs |  | Aggregate Impairment Charge for the Twelve Months Ended December 31, 2023 |  | Aggregate Gain on Sale of Real Estate, net
445,036 |  |  | $ | 39,634 |  |  | $ | 2,626 |  |  | $ | 3,591 |  |  | $ | 7,737 |
Our 2023 dispositions were not classified as discontinued operations because they did not represent a strategic shift in operations, nor will they 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 years ended December 31, 2023, 2022, and 2021, respectively (dollars in thousands):
|  | For the year ended December 31,
|  | 2023 |  | 2022 |  | 2021
Operating revenue |  | $ | 2,223 |  |  | $ | 7,426 |  |  | $ | 8,234 |
Operating expense |  | 3,816 |  | (1) | 16,529 |  | (3) | 7,222 |
Other income (expense), net |  | 9,884 |  | (2) | (1,545) |  |  | (1,649) |
Income (expense) from real estate and related assets sold |  | $ | 8,291 |  |  | $ | (10,648) |  |  | $ | (637) |
(1)Includes a $3.6 million impairment charge. (2)Includes a $7.7 million gain on sale of real estate, net, from seven property sales and a $2.8 million gain on debt extinguishment from one property sale. (3)Includes a $10.7 million impairment charge. Real Estate Held for Sale At December 31, 2023, we had three properties classified as held for sale, located in Richardson, Texas; Columbus, Ohio; and Tifton, Georgia. We consider these assets to be non-core to our long term strategy. At December 31, 2022, we had one property classified as held for sale, located in Columbia, South Carolina. The table below summarizes the components of the assets held for sale at December 31, 2023 reflected on the accompanying consolidated balance sheet (dollars in thousands):
|  | December 31, 2023 |  | December 31, 2022
Total real estate held for sale |  | $ | 27,496 |  |  | $ | 3,293 |
Lease intangibles, net |  | 1,284 |  |  | — |
Deferred rent receivable, net |  | 7 |  |  | — |
Total Assets Held for Sale |  | $ | 28,787 |  |  | $ | 3,293 |
Liabilities Held for Sale |  |  |  |
Deferred rent liability, net |  | $ | 676 |  |  | $ | — |
Total Liabilities Held for Sale |  | $ | 676 |  |  | $ | — |
Impairment Charges We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the year ended December 31, 2023 and identified two held and used assets, located in Draper, Utah and Egg Harbor, New Jersey, which were impaired by an aggregate $8.0 million during the quarters ended September 30, 2023 and December 31, 2023. In performing our impairment testing, the undiscounted cash flows were below the carrying value, which resulted in us recognizing an impairment charge. We evaluated our held for sale assets to determine if any of these assets were impaired during the year ended December 31, 2023 and identified three held for sale assets, located in Richardson, Texas, Taylorsville, Utah, and Columbus, Ohio, which were impaired by an aggregate $11.3 million during the three months ended June 30, 2023 and December 31, 2023. 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 year ended December 31, 2023. During the year ended December 31, 2022, we 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. As the undiscounted cash flows for this asset was below the carrying value, we evaluated the fair value of the asset using a third-party expert to determine the fair value for this asset, which resulted in us recognizing an impairment charge. We also 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, which resulted in us recognizing an impairment charge. 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 we are 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. The fair values for the above properties were calculated using Level 3 inputs which were calculated using an estimated sales price, less estimated costs to sell. The estimated sales price was determined using executed purchase and sale agreements.

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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 -Topic 976 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//976/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 978 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//978/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 970 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//970/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 972 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//972/tableOfContent Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 974 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//974/tableOfContent + Details
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