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REAL ESTATE INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of the Company's real estate acquisitions

The following table details the Company’s real estate acquisitions during 2022 and 2021 (amounts in thousands). The Company determined that with respect to each of these acquisitions, the gross assets acquired are concentrated in a single identifiable asset. Therefore, these transactions do not meet the definition of a business and are accounted for as asset acquisitions. As such, direct transaction costs associated with these asset acquisitions have been capitalized to real estate assets and depreciated over their respective useful lives.


		Contract			Capitalized
	Date		Purchase	Terms of		Transaction
Description of Industrial Property	Acquired	Price		Payment	Costs
Conditioned Air Company of Naples LLC
Fort Myers, Florida	January 5, 2022	$	8,100	All cash (a)	$	66
Q.E.P. Co., Inc.
Dalton, Georgia	May 12, 2022		17,000	All cash (a)		330
Multi-tenant
Hillside, Illinois	May 16, 2022		5,770	All cash		112
Curaleaf, Inc.
Lexington, Kentucky	June 17, 2022		8,430	Cash and $5,480 mortgage (b)		80
Multi-tenant
Northwood, Ohio	November 15, 2022		8,629	Cash and $6,034 mortgage (c)		87
Multi-tenant
Northwood, Ohio	November 15, 2022		8,561	Cash and $6,034 mortgage (c)		86
TOTALS FOR 2022		$	56,490		$	761

Pureon, Inc.
Monroe, North Carolina	May 27, 2021	$	7,000	Cash and $4,500 mortgage (d)	$	60
Multi-tenant
Lehigh Acres, Florida	September 29, 2021		9,355	Cash and $6,100 mortgage (d)		77
Home Depot USA, Inc.
Omaha, Nebraska	November 12, 2021		7,975	All cash		67
TOTALS FOR 2021		$	24,330		$	204

(a)	Subsequent to the acquisitions of the Fort Myers, Florida and Dalton, Georgia properties, the Company obtained new mortgage debt of $4,860 and $10,000, bearing interest rates of 3.09% and 3.50% and maturing in 2031 and 2032, respectively.

(b)	Simultaneously with the acquisition of this property, the Company obtained new mortgage debt of $5,480, bearing an interest rate of 3.85% and maturing in 2047.

(c)	Simultaneously with the acquisition of these properties, the Company assumed a $6,034 mortgage encumbering both properties, bearing an interest rate of 3.57% and maturing in 2030.

(d)	Simultaneously with the acquisitions of these properties, the Company obtained new mortgage debt of $4,500 and $6,100, bearing interest rates of 3.25% and 3.17% and maturing in 2027 and 2031, respectively.

Schedule of allocation of the purchase price for the company's acquisitions of real estate

The following table details the allocation of the purchase price and capitalized transaction costs for the Company’s acquisition of real estate during 2022 and 2021 (amounts in thousands):


			Building &		Intangible Lease				Mortgage
Description of Industrial Property	Land		Improvements		Asset		Liability		Intangible		Total
Conditioned Air Company of Naples LLC
Fort Myers, Florida	$	991	$	6,876	$	568	$	(269)	$	—	$	8,166
Q.E.P. Co., Inc.
Dalton, Georgia		547		15,836		1,223		(276)		—		17,330
Multi-tenant
Hillside, Illinois		2,560		2,975		539		(192)		—		5,882
Curaleaf, Inc.
Lexington, Kentucky		1,558		6,881		486		(415)		—		8,510
Multi-tenant
Northwood, Ohio		181		8,306		747		(854)		336		8,716
Multi-tenant
Northwood, Ohio		171		7,383		759		—		334		8,647
TOTALS FOR 2022	$	6,008	$	48,257	$	4,322	$	(2,006)	$	670	$	57,251

Pureon, Inc.
Monroe, North Carolina	$	897	$	5,106	$	1,057	$	—	$	—	$	7,060
Multi-tenant
Lehigh Acres, Florida		1,934		7,393		701		(596)		—		9,432
Home Depot USA, Inc.
Omaha, Nebraska		1,001		6,547		530		(36)		—		8,042
TOTALS FOR 2021	$	3,832	$	19,046	$	2,288	$	(632)	$	—	$	24,534

Summary of market capitalization rate and discount rates associated with the assessment of the fair value of the related lease and mortgage intangibles for the Company's acquisition of real estate

The following table details the market capitalization and discount rates associated with the assessment of the fair value of the related lease and mortgage intangibles for the Company’s acquisition of real estate:


			Discount Rate (a)
Year		Market Cap	Lease		Mortgage
Acquired	Description of Industrial Property	Rate (a)	Intangible		Intangible
2022	Conditioned Air Company of Naples LLC	5.50%	5.60%		—
	Fort Myers, Florida
2022	Q.E.P. Co., Inc.	5.00%	5.69%		—
	Dalton, Georgia
2022	Multi-tenant	6.25%	6.63%	(b)	—
	Hillside, Illinois
2022	Curaleaf, Inc.	5.25%	5.88%		—
	Lexington, Kentucky
2022	Multi-tenant	6.75%	5.60%		5.75%
	Northwood, Ohio
2022	Multi-tenant	6.75%	5.60%		5.75%
	Northwood, Ohio

2021	Pureon, Inc.	7.00%	6.08%		—
	Monroe, North Carolina
2021	Multi-tenant	6.75%	5.60%		—
	Lehigh Acres, Florida
2021	Home Depot USA, Inc.	6.25%	6.16%		—
	Omaha, Nebraska

(a)

The fair value of the tangible and intangible leases and mortgage was assessed as of the acquisition date using an income approach and estimated cash flow projections which utilize an appropriate market capitalization rate and discount rate which is categorized as a Level 3 unobservable input in the fair value hierarchy (as defined in Note 2).

(b)	Represents the weighted average discount rate of the warehouse lease (i.e., 5.77%) and the office lease (i.e., 9.03%).

Summary of information regarding the acquired intangibles related to acquisitions of real estate

The following table details information regarding the acquired intangibles related to the Company’s acquisitions of real estate during the periods indicated:


		December 31, 2022						December 31, 2021
		Intangible						Intangible
		Lease Assets		Mortgage Asset (a)		Lease Liabilities		Lease Assets		Mortgage Asset		Lease Liabilities
Weighted average amortization (years)		6.1		7.1		8.8		4.1		n/a		8.2
Accumulated amortization (in thousands)	$	23,506	$	12	$	5,061	$	25,892	$	n/a	$	8,968

(a)	In connection with the assumption of a below-market mortgage in 2022 upon the acquisition of the Northwood, Ohio properties (“Northwood mortgage intangible”).

The following table details the amortization of acquired intangibles and the classification in the Company’s consolidated statements of income for the periods indicated (amounts in thousands):


	Year Ended December 31,
	2022		2021		2020		Classification
Intangible lease assets/liabilities	$	831	$	785	$	780	Rental income, net
Tenant origination costs		4,722		4,700		4,617	Depreciation and amortization
Intangible mortgage asset (a)		12		n/a		n/a	Interest expense

(a)	In connection with the Northwood mortgage intangible.

Schedule of future amortization of acquired intangibles

As of December 31, 2022, the future amortization of the Company’s acquired intangibles are as follows (amounts in thousands):


For the year ended December 31,		Intangible Lease Assets (a)		Tenant Origination Costs (b)		Intangible Mortgage Asset (c)		Intangible Lease Liabilities (d)
2023	$	286	$	4,561	$	93	$	1,162
2024		214		3,183		93		940
2025		188		2,684		93		718
2026		150		2,520		93		711
2027		92		1,844		93		763
Thereafter		334		3,785		193		6,831
Total	$	1,264	$	18,577	$	658	$	11,125

(a)	The result of acquired above-market leases and will be deducted from rental income through 2032.

(b)	The result of acquired in-place leases and will be charged to Depreciation and amortization expense through 2055.

(c)	In connection with the Northwood mortgage intangible and will be charged to interest expense through 2030.

(d)	The result of acquired below-market leases and will be added to rental income through 2055.