Real Estate and Intangible Assets |
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| Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate and Intangible Assets | Real Estate and Intangible Assets Real Estate
The following table sets forth the components of our investments in real estate as of December 31, 2025 and 2024, respectively, excluding real estate held for sale as of December 31, 2025 (dollars in thousands):
(1)This amount includes $2,711 of land value subject to land lease agreements which we may purchase at our option for a nominal fee.
Real estate depreciation expense on building and tenant improvements was $42.2 million, $39.5 million, and $41.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Acquisitions
During the years ended December 31, 2025 and 2024, we acquired 19 and seven industrial properties, respectively, which are summarized below (dollars in thousands):
We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the years ended December 31, 2025 and 2024, respectively, as follows (dollars in thousands):
(1)The Dallas-Fort Worth, Texas property that we acquired is subject to a ground lease, therefore there is no land asset included on the condensed consolidated balance sheets.
(2)This amount includes $838 and $90 of loans receivable included in Other assets on the consolidated balance sheets, respectively.
(3)This amount includes $1,627 and $155 of prepaid rent included in Other liabilities on the consolidated balance sheets, respectively.
Future Lease Payments
Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):
In accordance with the lease terms, substantially all operating expenses are required to be paid by the tenant directly, or reimbursed to us from the tenant; however, we would be required to pay operating expenses on the respective properties in the event the tenants fail to pay them.
Lease Revenue Reconciliation
The table below sets forth the allocation of lease revenue between fixed contractual lease payments and variable lease payments for the years ended December 31, 2025, 2024, and 2023, respectively (dollars in thousands):
Sales-Type Leases
During the year ended December 31, 2024, we had one lease classified as a sales-type lease. We recorded a sales-type lease receivable of $18.6 million in the consolidated balance sheet, net of $0.02 million in allowance for credit loss, and derecognized the carry value of $14.6 million in the consolidated balance sheet. We recognized a $3.9 million selling profit from sale-type leases, net, that was included in gain on sale of real estate, net, in the consolidated statements of operations. For the years ended December 31, 2025 and 2024, the interest income earned from sales-types leases of $0.5 million and $0.1 million, respectively, was included in other income in the consolidated statements of operations. There was no sales-type lease activity in the year ended December 31, 2023. In developing the expected credit loss, we reviewed the tenant’s credit rating, which was AA- stable, and performed a collectibility analysis, confirming they were current on payments as of December 31, 2024. The sales-type lease receivable, net, approximated fair value as of December 31, 2024.
On April 1, 2025, the tenant exercised their purchase option provided in their lease agreement with us. The sale transaction was completed on April 30, 2025, resulting in the realization of the sales-type lease receivable from the consolidated balance sheets. Refer to Note 4, “Real Estate Dispositions, Held for Sale, and Impairment Charges” for additional detail.
Accounts Receivable
At December 31, 2025 and 2024, accounts receivable from tenants totaled $2.1 million and $1.4 million, respectively, included in other assets on the consolidated balance sheets.
Intangible Assets
The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of December 31, 2025 and 2024, excluding real estate held for sale (dollars in thousands):
Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $16.0 million, $16.3 million, and $16.7 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is included in depreciation and amortization expense in the consolidated statement of operations and comprehensive income.
Total amortization related to above-market lease values was $0.5 million, $0.5 million, and $0.6 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is included in lease revenue in the consolidated statement of operations and comprehensive income.
Total amortization related to below-market lease values was $6.5 million, $7.3 million, and $8.0 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is included in lease revenue in the consolidated statement of operations and comprehensive income.
We acquired 19 industrial properties during the year ended December 31, 2025, and acquired seven industrial properties during the year ended December 31, 2024. The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the years ended December 31, 2025 and 2024, respectively, were as follows:
The estimated aggregate amortization expense to be recorded for in-place leases, leasing costs, and customer relationships for each of the five succeeding fiscal years and thereafter is as follows, excluding real estate held for sale as of December 31, 2025 (dollars in thousands):
The estimated aggregate rental income to be recorded for the amortization of both above and below market leases for each of the five succeeding fiscal years and thereafter is as follows, excluding real estate held for sale as of December 31, 2025 (dollars in thousands):
(1)Does not include ground lease amortization of $89.
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