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Real Estate | 12 Months Ended
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Dec. 31, 2023
Real Estate [Abstract] |
Real Estate | Real Estate The following table summarizes the Company’s gross investment in real estate as of:
|  | December 31, 2023 |  | December 31, 2022
Land |  | $ | 231,175 |  |  | $ | 327,408 |
Building and improvements |  | 1,968,314 |  |  | 2,631,965 |
Tenant origination and absorption cost |  | 402,251 |  |  | 535,889 |
Construction in progress |  | 8,371 |  |  | 1,994 |
Total real estate |  | $ | 2,610,111 |  |  | $ | 3,497,256 |
Depreciation expense for buildings and improvements for the years ended December 31, 2023, 2022, and 2021 was $72.3 million, $113.2 million, and $125.4 million, respectively. Amortization expense for intangibles, including but not limited to, tenant origination and absorption costs for the years ended December 31, 2023, 2022, and 2021 was $39.9 million, $77.6 million, and $84.2 million respectively. Acquisitions of Real Estate The Company had no acquisitions of real estate during the years ended December 31, 2023 and December 31, 2022, respectively. Dispositions of Real Estate For the year ended December 31, 2023, the Company sold eleven properties for gross disposition proceeds of approximately $335.9 million. The Company recognized a net gain of approximately $29.2 million, detailed in the table below:
Sale Date |  | Segment |  | Location |  | Gross Proceeds |  | Gain (Loss)
Three Months Ended March 31, 2023
January 6, 2023 |  | Industrial |  | Irvine, CA |  | $ | 40,000 |  |  | $ | 18,690 |
February 16, 2023 |  | Industrial |  | Clinton, SC |  | 19,300 |  |  | 7,109 |
March 2, 2023 |  | Office |  | Herndon, VA |  | 110,300 |  |  | 4,811 |
|  |  |  | Total |  | 169,600 |  |  | 30,610 |
April 13, 2023 |  | Listing Date |  |  |  |  |  |
Three Months Ended June 30, 2023
May 9, 2023 |  | Other |  | Lone Tree, CO |  | 5,600 |  |  | (275) |
May 15, 2023 |  | Office |  | Houston, TX |  | 62,300 |  |  | (5,024) |
June 8, 2023 |  | Other |  | Greenwood Village, CO |  | 5,000 |  |  | (5,228) |
June 30, 2023 |  | Office |  | Andover, MA |  | 23,700 |  |  | 122 |
June 30, 2023 |  | Office |  | Andover, MA |  | 34,200 |  |  | 704 |
|  |  |  | Total |  | 130,800 |  |  | (9,701) |
Three Months Ended September 30, 2023 |  |  |  |
August 16, 2023 |  | Other |  | Rancho Cordova, CA |  | 8,300 |  |  | 3,748 |
|  |  |  | Total |  | 8,300 |  |  | 3,748 |
Three Months Ended December 31, 2023 |  |  |  |
December 15, 2023 |  | Other |  | Houston, TX |  | 5,825 |  |  | 2,014 |
December 20, 2023 |  | Office |  | Tyler, TX |  | 21,400 |  | 1 | 2,493 |
|  |  |  | Total |  | 27,225 |  |  | 4,507 |
Total for the Year Ended December 31, 2023 |  |  |  | $ | 335,925 |  |  | $ | 29,164 |
(1) The gross proceeds amount of $21.4 million is inclusive of a lease termination fee received in conjunction with the sale. Real Estate Impairments During the year ended December 31, 2023, in connection with the preparation and review of the financial statements, the Company recorded a real estate impairment provision of approximately $409.5 million on seventeen properties, consisting of nine Office segment properties for $208.3 million and eight Other segment properties for $201.2 million. The impaired properties are located in the Southwest, Northeast, Midwest, West, and Southeast regions of the United States. This impairment resulted from changes during the year related to anticipated hold periods, estimated selling prices and potential vacancies that impacted the recoverability of these assets. In determining the fair value of the properties, the Company considered Level 3 inputs. See Note 8, Fair Value Measurements, for details. Real Estate and Acquired Lease Intangibles The following table summarizes the Company’s allocation of acquired and contributed real estate asset value to in-place lease valuation, tenant origination and absorption cost, and other intangibles, net of the write-off of intangibles for the years ended December 31, 2023 and 2022:
| December 31,
| 2023 |  | 2022
In-place lease valuation (above market) | $ | 22,759 |  |  | $ | 28,619 |
In-place lease valuation (above market) - accumulated amortization | (16,616) |  |  | (19,799) |
In-place lease valuation (above market), net | 6,143 |  |  | 8,820 |
Intangibles - other | 32,028 |  |  | 32,028 |
Intangibles - other - accumulated amortization | (8,481) |  |  | (6,987) |
Intangibles - other, net | 23,547 |  |  | 25,041 |
Intangible assets, net | $ | 29,690 |  |  | $ | 33,861 |
In-place lease valuation (below market) | $ | (42,534) |  |  | $ | (48,686) |
Land leasehold interest (above market) | (3,072) |  |  | (3,072) |
In-place lease valuation & land leasehold interest - accumulated amortization | 29,770 |  |  | 31,358 |
Intangibles - other (above market) | (187) |  |  | (258) |
Intangible liabilities, net | $ | (16,023) |  |  | $ | (20,658) |
Tenant origination and absorption cost | $ | 402,251 |  |  | $ | 535,889 |
Tenant origination and absorption cost - accumulated amortization | (221,786) |  |  | (282,383) |
Tenant origination and absorption cost, net | $ | 180,465 |  |  | $ | 253,506 |
The intangible assets are amortized over the remaining lease term of each property, which on a weighted-average basis, was approximately 6.5 years and 7.1 years as of December 31, 2023 and 2022, respectively. The amortization of the intangible assets and other leasing costs for the respective periods is as follows:
| Amortization (income) expense for the Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Above and below market leases, net | $ | (1,239) |  |  | $ | (2,205) |  |  | $ | (1,323) |
Tenant origination and absorption cost | $ | 38,305 |  |  | $ | 73,172 |  |  | $ | 78,389 |
Ground leasehold amortization (below market) | $ | (388) |  |  | $ | (372) |  |  | $ | (349) |
Other leasing costs amortization | $ | 2,013 |  |  | $ | 4,754 |  |  | $ | 6,209 |
The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, net, tenant origination and absorption costs, ground leasehold interest, and other leasing costs as of December 31, 2023 for the next five years:
Year |  | In-place lease valuation, net |  | Tenant origination and absorption costs |  | Ground leasehold interest |  | Other leasing costs
2024 |  | $ | (1,169) |  |  | $ | 29,107 |  |  | $ | (318) |  |  | $ | 2,230 |
2025 |  | $ | (1,165) |  |  | $ | 26,012 |  |  | $ | (317) |  |  | $ | 2,491 |
2026 |  | $ | (1,073) |  |  | $ | 24,872 |  |  | $ | (317) |  |  | $ | 2,442 |
2027 |  | $ | (829) |  |  | $ | 23,199 |  |  | $ | (317) |  |  | $ | 2,261 |
2028 |  | $ | (644) |  |  | $ | 19,657 |  |  | $ | (318) |  |  | $ | 2,126 |
Real Estate Held for Sale As of December 31, 2023, two properties met the criteria for classification as held for sale as follows: (i) in our Other segment, one property located in Jefferson City, Missouri, where the tenant exercised its fixed-price purchase option to acquire the property; and (ii) in our Office segment, one property located in Johnston, Iowa, where an affiliate of the existing tenant agreed to purchase the asset (note that this sale closed subsequent to year-end, see Note 16, Subsequent Events, for further details). The following summary presents the major components of assets and liabilities related to the real estate properties held for sale as of December 31, 2023:
ASSETS |  | As of December 31, 2023
Land |  | $ | 10,091 |
Building and improvements |  | 42,678 |
Tenant origination and absorption cost |  | 11,519 |
Total real estate |  | 64,288 |
Less: accumulated depreciation |  | (14,636) |
Total real estate, net |  | 49,652 |
Intangible assets, net |  | 144 |
Deferred rent |  | 407 |
Other assets, net |  | 8 |
Total real estate and other assets held for sale |  | $ | 50,211 |
LIABILITIES |  |
Intangible liabilities, net |  | $ | 21 |
Accrued expenses and other liabilities |  | 518 |
Liabilities of real estate assets held for sale |  | $ | 539 |

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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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