NOTE 3—REAL ESTATE INVESTMENTS AND MINIMUM FUTURE RENTALS

Real Estate Acquisitions

The following chart details the Company's real estate acquisitions during 2014 and 2013 (amounts in thousands):

Description of Property	Date Acquired	Contract Purchase Price		Terms of Payment(a)	Third Party Real Estate Acquisition Costs(b)
Total Wine and More retail store, Greensboro, North Carolina	January 21, 2014	$	2,971	All cash	$	20
Chuck E Cheese restaurant, Indianapolis, Indiana	January 23, 2014		2,138	All cash		10
Savers Thrift Superstore, Highlands Ranch, Colorado	May 7, 2014		4,825	All cash		83
Hobby Lobby retail store, Woodbury, Minnesota	May 21, 2014		4,770	All cash		46
Land—River Crossing Apartments, Sandy Springs, Georgia(c)	June 4, 2014		6,510	All cash		—	(d)
Noxell Corporation industrial building, Joppa, Maryland(e)	June 26, 2014		11,650	All cash		—	(d)
Regal Cinemas theater, Indianapolis, Indiana	October 2, 2014		9,000	All cash		78
Pathmark supermarket, Philadelphia, Pennsylvania(f)	October 21, 2014		7,729	Cash and $4,635 mortgage(g)		162
Progressive Converting distribution facility, New Hope, Minnesota	November 21, 2014		7,200	All cash		38
Other(h)			—			42

Totals for 2014		$	56,793		$	479

Description of Property	Date Acquired	Contract Purchase Price		Terms of Payment(a)	Third Party Real Estate Acquisition Costs(b)
Kmart retail store, Clemmons, North Carolina(i)	March 22, 2013	$	4,640	All cash	$	119
Shutterfly flex facility, Fort Mill, South Carolina	July 1, 2013		15,500	Cash and $9,300 mortgage(j)		124
Texas Land & Cattle restaurant, Killeen, Texas	July 30, 2013		2,020	All cash		—	(k)
Hooters restaurant, Concord, North Carolina	August 1, 2013		2,469	All cash		15
TRISUN Health Care—assisted living facility, Round Rock, Texas	August 6, 2013		22,800	Cash and $15,275 mortgage(l)		321
Hooters restaurant, Myrtle Beach, South Carolina	September 3, 2013		2,635	All cash		33
Joe's Crab Shack restaurant, Ann Arbor, Michigan	September 12, 2013		2,980	All cash		31
FedEx Express facility, Indianapolis, Indiana	September 13, 2013		9,270	All cash		39
Northern Tool & Equipment distribution facility, Fort Mill, South Carolina	September 18, 2013		39,195	Cash and $27,300 mortgage(m)		91
TGIF restaurant, Greensboro, North Carolina	December 3, 2013		3,003	All cash		—	(k)
TGIF restaurant, Richmond, Virginia	December 3, 2013		3,017	All cash		—	(k)
Other(n)			—			148

Totals for 2013		$	107,529		$	921

(a)	All of the mortgages listed in this column were obtained from institutional lenders simultaneously with the acquisition of the respective properties.
(b)	Included as an expense in the accompanying consolidated statements of income.
(c)	The Company's fee interest in the land is collateral for the tenant's mortgage loan secured by the buildings located at this property.
(d)	Transaction costs aggregating $303 incurred were capitalized as these were asset acquisitions.
(e)	Represents 100% of the consolidated joint venture in which the Company has a 95% interest. The non-controlling interest contributed $306 for its 5% interest, which was equal to the fair value of such interest at the date of purchase. The Company also contributed $5,825 to the venture as senior preferred equity.
(f)	Represents 100% of the consolidated joint venture in which the Company has a 90% interest. The non-controlling interest contributed $333 for its 10% interest, which was equal to the fair value of such interest at the date of purchase.
(g)	The mortgage bears interest at 3.885% per annum and matures November 2021.
(h)	Costs incurred for properties purchased in 2013 and transactions that were not consummated.
(i)	Represents 100% of the consolidated joint venture in which the Company has a 90% interest. The non-controlling interest contributed $470 for its 10% interest, which was equal to the fair value of such interest at the date of purchase.

(j)	The mortgage bears interest at 4.562% per annum and matures July 2023.
(k)	Transaction costs of $50 incurred were capitalized as these were asset acquisitions.
(l)	The mortgage bears interest at 5.375% per annum and matures August 2023.
(m)	The mortgage bears interest at 4.875% per annum and matures April 2029.
(n)	Costs incurred for potential acquisitions, properties purchased in 2012 and transactions that were not consummated.

The following chart provides the allocation of the purchase price for the Company's real estate acquisitions during 2014 and 2013 (amounts in thousands):

							Intangible Lease
					Building Improvements		Intangible Lease
Description of Property	Land		Building		Building Improvements		Asset			Liability			Total
Total Wine and More retail store, Greensboro, North Carolina	$	1,046	$	1,468	$	83	$	374		$	—		$	2,971
Chuck E Cheese restaurant, Indianapolis, Indiana		853		1,321		145		94			(275	)		2,138
Savers Thrift Superstore, Highlands Ranch, Colorado		2,361		2,644		280		856			(1,316	)		4,825
Hobby Lobby retail store, Woodbury, Minnesota		1,190		3,667		335		734			(1,156	)		4,770
Land—River Crossing Apartments, Sandy Springs, Georgia(a)		6,516		—		—		—			—			6,516
Noxell Corporation industrial building, Joppa, Maryland(b)		3,805		7,991		151		—			—			11,947
Regal Cinemas theater, Indianapolis, Indiana		3,087		5,000		225		1,575			(887	)		9,000
Pathmark supermarket, Philadelphia, Pennsylvania		1,793		5,396		244		440			(144	)		7,729
Progressive Converting distribution facility, New Hope, Minnesota		881		6,033		30		757			(501	)		7,200

Subtotals		21,532		33,520		1,493		4,830			(4,279	)		57,096
Other(c)		74		70		18		(59	)		(97	)		6

Totals for 2014	$	21,606	$	33,590	$	1,511	$	4,771		$	(4,376	)	$	57,102

							Intangible Lease
					Building Improvements		Intangible Lease
Description of Property	Land		Building		Building Improvements		Asset			Liability			Total
Kmart retail store, Clemmons, North Carolina	$	2,496	$	2,553	$	653	$	425		$	(1,487	)	$	4,640
Shutterfly flex facility, Fort Mill, South Carolina		1,841		12,353		335		1,546			(575	)		15,500
Texas Land & Cattle restaurant, Killeen, Texas		1,263		739		64		—			—			2,066	(d)
Hooters restaurant, Concord, North Carolina		999		954		122		394			—			2,469
TRISUN Health Care -assisted living facility, Round Rock, Texas		1,678		16,577		93		4,452			—			22,800
Hooters restaurant, Myrtle Beach, South Carolina		1,102		1,090		71		372			—			2,635
Joe's Crab Shack restaurant, Ann Arbor, Michigan		1,098		1,338		122		422			—			2,980
FedEx Express facility, Indianapolis, Indiana		1,224		6,438		498		1,222			(112	)		9,270
Northern Tool & Equipment distribution facility, Fort Mill, South Carolina		1,804		31,635		2,014		3,742			—			39,195
TGIF restaurant, Greensboro, North Carolina		1,768		1,054		183		—			—			3,005	(d)
TGIF restaurant, Richmond, Virginia		1,678		1,184		157		—			—			3,019	(d)

Subtotals		16,951		75,915		4,312		12,575			(2,174	)		107,579
Other(e)		—		—		—		(951	)		(36	)		(987	)

Totals for 2013	$	16,951	$	75,915	$	4,312	$	11,624		$	(2,210	)	$	106,592

(a)	Includes capitalized transaction costs of $6 incurred with this asset acquisition.
(b)	Includes capitalized transaction costs of $297 incurred with this asset acquisition.
(c)	Adjustments to finalize intangibles relating to properties purchased in 2013.
(d)	Includes capitalized transaction costs of $50 incurred with these asset acquisitions.
(e)	Adjustments to finalize intangibles relating to properties purchased in 2012.

All of the properties purchased in 2014 and 2013 are (i) currently 100% occupied and (ii) net leased by a single tenant pursuant to a lease that expires between 2015 through 2044, other than the Northern Tool property, which is jointly leased by two companies under common ownership.

In June 2014, the Company purchased land in Sandy Springs, Georgia and simultaneously entered into a long-term triple net ground lease with the owner/operator of this complex. Pursuant to the terms of the ground lease, the owner/operator is obligated to make certain unit renovations as and when units become vacant. A cash reserve of $1,607,000 is held on behalf of the owner/operator to cover renovation work and other reserve requirements and is classified as Restricted cash on the consolidated balance sheet. At closing, the owner/operator obtained a $16,230,000 mortgage from a third party which, together with the Company's purchase of the land, provided substantially all of the aggregate funds to acquire the complex. The Company provided its land as collateral for the owner/ operator's mortgage loan; accordingly the land position is subordinated to the mortgage.

As a result of the 2014 and 2013 purchases, the Company recorded intangible lease assets of $4,771,000 and $11,624,000, respectively, and intangible lease liabilities of $4,376,000 and $2,210,000, respectively, representing the value of the acquired leases and origination costs. As of December 31, 2014, the weighted average amortization period for the 2014 and 2013 acquisitions is 9.3 years and 13.2 years for the intangible lease assets and 9.1 years and 5.9 years for the intangible lease liabilities, respectively. The Company is currently in the process of finalizing the purchase price allocation for a property purchased in October 2014; therefore the allocation is preliminary and subject to change.

At December 31, 2014 and 2013, accumulated amortization of intangible lease assets was $9,170,000 and $7,054,000, respectively, and accumulated amortization of intangible lease liabilities was $3,928,000 and $3,099,000, respectively.

The Company recognized a net increase (decrease) in rental revenue of $267,000, $160,000 and $(2,000) for the amortization of the above/below market leases for the years ended December 31, 2014, 2013 and 2012, respectively. For the years ended December 31, 2014, 2013 and 2012, the Company recognized amortization expense of $2,430,000, $1,647,000 and $1,006,000, respectively, relating to the amortization of the origination costs.

The unamortized balance of intangible lease assets as a result of acquired above market leases at December 31, 2014 will be deducted from rental income through 2032 as follows (amounts in thousands):

2015	$	468
2016		453
2017		413
2018		348
2019		263
Thereafter		1,634

Total	$	3,579

The unamortized balance of intangible lease liabilities as a result of acquired below market leases at December 31, 2014 will be added to rental income through 2055 as follows (amounts in thousands):

2015	$	982
2016		967
2017		958
2018		835
2019		789
Thereafter		5,932

Total	$	10,463

The unamortized balance of origination costs associated with in-place leases at December 31, 2014 will be charged to amortization expense through 2055 as follows (amounts in thousands):

2015	$	2,594
2016		2,480
2017		2,387
2018		2,238
2019		2,073
Thereafter		12,036

Total	$	23,808

Minimum Future Rents

The minimum future contractual rents (without taking into consideration straight-line rent or amortization of intangibles) to be received over the next five years and thereafter on the operating leases in effect at December 31, 2014 are as follows (amounts in thousands):

2015	$	53,345
2016		50,916
2017		48,176
2018		45,803
2019		41,338
Thereafter		217,547

Total	$	457,125

The rental properties owned at December 31, 2014 are leased under non-cancellable operating leases with current expirations ranging from 2015 to 2044, with certain tenant renewal rights. Substantially all lease agreements are net lease arrangements which require the tenant to pay rent and substantially all the expenses of the leased property including maintenance, taxes, utilities and insurance. For certain properties, the tenants pay the Company, in addition to the contractual base rent, their pro rata share of real estate taxes and operating expenses. Certain lease agreements provide for periodic rental increases and others provide for increases based on the consumer price index.

Unbilled Rent Receivable

At December 31, 2014 and 2013, the Company's unbilled rent receivables aggregating $12,815,000 and $13,743,000, respectively, represent rent reported on a straight-line basis in excess of rental payments required under the respective leases. The unbilled rent receivable is to be billed and received pursuant to the lease terms during the next 30 years.

During the year ended December 31, 2014, the Company wrote off $2,417,000 of unbilled straight-line rent receivable relating to the New Jersey property sold during the year which reduced the gain on sale reported on the consolidated statements of income (see Note 4).

Acquisition Subsequent to December 31, 2014

On February 25, 2015, the Company purchased through a joint venture in which it has a 90% interest, a shopping center located in Lakewood, Colorado for $17,485,000, which was financed in part by mortgage financing of $11,853,000. The mortgage, which matures in February 2025 bears interest at a rate of 4.12% per annum. The property has 29 tenant spaces and was 94.5% occupied at the time of acquisition.