Note 4 - Real Estate Acquisitions

The following chart details the Company’s acquisitions of real estate and an interest in a joint venture during the three months ended March 31, 2015 (amounts in thousands):

Description of Property	Date Acquired	Contract Purchase Price		Terms of Payment	Third Party Real Estate Acquisition Costs (a)
Marston Park Plaza retail stores, Lakewood, Colorado (b)	February 25, 2015	$	17,485	Cash and $11,853 mortgage (c)	$	184
Interline Brands distribution facility, Louisville, Kentucky	March 18, 2015	4,400		Cash and $2,640 mortgage (d)	44
Land — The Meadows Apartments, Lakemoor, Illinois	March 24, 2015	9,300		All cash	—		(e)
Joint venture interest- Shopko retail store, Lincoln, Nebraska (f)	March 31, 2015	6,300		All cash (f)	—
Other costs (g)		—			20
Totals		$	37,485		$	248

(a)

Included as an expense in the accompanying consolidated statements of income.

(b)

Owned by a joint venture in which the Company has a 90% interest. The non-controlling interest contributed $663 for its 10% interest, which was equal to the fair value of such interest at the date of purchase.

(c)

The mortgage debt obtained in connection with the purchase bears interest at 4.12% per annum and matures February 2025.

(d)

The mortgage debt obtained in connection with the purchase bears interest at 3.88% per annum and matures February 2021.

(e)

Transaction costs aggregating $228 incurred with this asset acquisition were capitalized.

(f)

The Company purchased its unconsolidated joint venture partner’s 50% interest for $6,300. The payment was comprised of (i) $2,636 paid directly to the partner and (ii) $3,664, substantially all of which was used to pay off the partner’s 50% share of the underlying joint venture mortgage.

(g)

Costs incurred for transactions that were not consummated.

The following chart provides the preliminary allocation of the purchase price for the Company’s acquisitions of real estate and an interest in a joint venture during the three months ended March 31, 2015 (amounts in thousands):

					Building		Intangible Lease
Description of Property	Land		Building		Improvements		Asset		Liability			Total
Marston Park Plaza retail stores, Lakewood, Colorado	$	6,005	$	10,109	$	700	$	1,493	$	(822	)	$	17,485
Interline Brands distribution facility, Louisville, Kentucky	578		3,622		105		95		—			4,400
Land — The Meadows Apartments, Lakemoor, Illinois (a)	9,528		—		—		—		—			9,528
Shopko retail store, Lincoln, Nebraska (b)	4,009		11,040		574		930		(3,960		)	12,593
Subtotals	20,120		24,771		1,379		2,518		(4,782		)	44,006
Other (c)	12		19		—		—		(31		)	—
Totals	$	20,132	$	24,790	$	1,379	$	2,518	$	(4,813	)	$	44,006

(a)

Includes capitalized transaction costs of $228 incurred with this asset acquisition.

(b)

Fair value of the assets previously owned by an unconsolidated joint venture of the Company. The Company owns 100% of this property as a result of its purchase of its partner’s 50% interest on March 31, 2015.

(c)

Adjustments to finalize the purchase price allocation relating to a property purchased in October 2014.

With the exception of the Lakewood, Colorado property, the properties purchased by the Company in 2015 are each net leased and occupied by a single tenant pursuant to leases that expire between 2021 through 2045. The Lakewood, Colorado property has 29 tenant spaces and is 94.5% occupied with leases expiring between 2015 and 2032.

As a result of the Company’s purchase on March 31, 2015 of its partner’s 50% interest in an unconsolidated joint venture that owns a property in Lincoln, Nebraska, it obtained a controlling financial interest. In accordance with GAAP, the Company had presented the investee in accordance with the equity method for the periods prior to gaining control and ceased equity method of accounting and consolidated the investment at March 31, 2015; the date which 100% control was obtained. In consolidating the investment, the Company recorded a purchase price fair value adjustment of $960,000 on the consolidated statements of income, representing the difference between the book value of its preexisting equity investment on the March 31, 2015 purchase date and the fair value of the investment.

As a result of the 2015 acquisitions, the Company recorded intangible lease assets of $2,518,000 and intangible lease liabilities of $4,782,000, representing the value of the origination costs and acquired leases. As of March 31, 2015, the weighted average amortization period for these acquisitions is 7.0 years for the intangible lease assets and 6.7 years for the intangible lease liabilities. The Company assessed the fair value of the lease intangibles based on estimated cash flow projections that utilize appropriate discount rates and available market information. Such inputs are Level 3 (as defined in Note 15) in the fair value hierarchy. The Company is currently in the process of finalizing the purchase price allocations for the properties acquired during the three months ended March 31, 2015; therefore the allocations are preliminary and subject to change.