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Real Estate Acquisition
3 Months Ended
Mar. 31, 2013
Real Estate Acquisition  
Real Estate Acquisition

 

Note 6 - Real Estate Acquisition

 

On March 22, 2013, a consolidated joint venture, in which the Company has a 90% interest, acquired a retail property located in North Carolina for an all cash purchase price of $4,640,000.  The property is 100% net leased to Kmart pursuant to a lease expiring in 2018.  The Company incurred third party acquisition costs of $113,000 during the three months ended March 31, 2013 related to this acquisition.

 

As a result of this acquisition, the Company recorded an intangible lease asset of $211,000 and an intangible lease liability of $823,000, representing the value of the origination costs and acquired lease.  As of March 31, 2013, the weighted average amortization period for this acquisition is 5.17 years for the intangible lease asset and liability. The Company assessed the fair value of the lease intangible based on estimated cash flow projections that utilize appropriate discount rates and available market information. Such inputs are Level 3 (as defined in Note 11) in the fair value hierarchy. The Company is currently in the process of finalizing the purchase price allocations for the property; therefore, the allocation is preliminary and subject to change.