Quarterly report [Sections 13 or 15(d)]

Real Estate and Intangible Assets

v3.26.1
Real Estate and Intangible Assets
 6 Months Ended
Jun. 30, 2026
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 June 30, 2026 and December 31, 2025, respectively, excluding real estate held for sale (dollars in thousands):
June 30, 2026 December 31, 2025
Real estate:
Land (1) $ 153,385  $ 150,873 
Building and improvements 1,207,539  1,183,036 
Tenant improvements 57,798  56,536 
Accumulated depreciation (381,606) (359,513)
Real estate, net $ 1,037,116  $ 1,030,932 
(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 $11.1 million and $22.1 million, respectively, for the three and six months ended June 30, 2026. Real estate depreciation expense on building and tenant improvements was $10.5 million and $20.3 million, respectively, for the three and six months ended June 30, 2025.

Acquisitions

We acquired one industrial property during the six months ended June 30, 2026, and we acquired ten industrial properties during the six months ended June 30, 2025. The acquisitions are summarized below (dollars in thousands):

Six Months Ended June 30, 2026
Location Aggregate Number of Properties (unaudited) Acquisition Date Aggregate Square Footage (unaudited) Weighted Average Remaining Lease Term at Time of Acquisition Aggregate Purchase Price Aggregate Capitalized Acquisition Expenses
Newport News, VA 1 May 20, 2026 153,890  5.9 years $ 23,004  $ 254 
1 153,890  5.9 years $ 23,004  $ 254 

Six Months Ended June 30, 2025
Location Aggregate Number of Properties (unaudited) Acquisition Date Aggregate Square Footage (unaudited) Weighted Average Remaining Lease Term at Time of Acquisition Aggregate Purchase Price Aggregate Capitalized Acquisition Expenses
Houston, TX 5 February 19, 2025 215,474  10.0 years $ 29,457  $ 207 
Dallas, TX 1 March 28, 2025 140,304  11.3 years 44,268  268 
Germantown, WI 1 May 9, 2025 303,991  19.4 years 62,851  151 
Harrison Township, MI 3 June 25, 2025 215,102  10.0 years 16,491  241 
10 874,871  14.3 years $ 153,067  $ 867 

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the six months ended June 30, 2026 and 2025 as follows (dollars in thousands):

Six Months Ended June 30, 2026 Six Months Ended June 30, 2025
Acquired assets and liabilities Purchase price Purchase price
Land $ 1,819  $ 10,640  (1)
Building 16,500  117,074 
Tenant Improvements 1,262  1,145 
In-place Leases 1,254  10,376 
Leasing Costs 544  11,595 
Customer Relationships 1,741  4,285 
Above Market Leases —  67 
Below Market Leases (116) (2,115) (2)
Total Purchase Price $ 23,004  $ 153,067 

(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 $250 of prepaid rent included in Other liabilities on the condensed consolidated balance sheets related to sale-leaseback acquisitions.
Land Acquisition

On June 25, 2026, we acquired a parcel of unimproved land adjacent to our Clintonville, Wisconsin property for $0.7 million. The land will be used to construct an approximately 86,000 square foot expansion of the current facility.
Future Lease Payments

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the six months ending December 31, 2026 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Year Tenant Lease Payments
Six Months Ending December 31, 2026 $ 70,782 
2027 127,283 
2028 117,676 
2029 111,603 
2030 103,090 
2031 94,893 
Thereafter 500,849 

In accordance with the lease terms, substantially all operating expenses are required to be paid by the tenant directly, or reimbursed to us by 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 payments and variable lease payments for the three and six months ended June 30, 2026 and 2025, respectively (dollars in thousands):

For the three months ended June 30,
Lease revenue reconciliation 2026 2025 $ Change % Change
Fixed lease payments $ 38,911  $ 34,328  $ 4,583  13.4  %
Variable lease payments 5,078  5,205  (127) (2.4) %
$ 43,989  $ 39,533  $ 4,456  11.3  %

For the six months ended June 30,
Lease revenue reconciliation 2026 2025 $ Change % Change
Fixed lease payments $ 75,637  $ 66,775  $ 8,862  13.3  %
Variable lease payments 10,261  10,259  2  —  %
$ 85,898  $ 77,034  $ 8,864  11.5  %

Sales-Type Leases

There was no sales-type lease activity in the three and six months ended June 30, 2026. During the six months ended June 30, 2025, we had one lease classified as a sales-type lease. We recorded a sales-type lease receivable of $18.5 million in the condensed consolidated balance sheets, net of $0.02 million in allowance for credit loss. For the three and six months ended June 30, 2025, the interest income earned from sales-type leases of $0.1 million and $0.5 million, respectively, was included in other income in the condensed consolidated statements of operations. In developing the expected credit loss, we reviewed the tenant’s credit rating, which is AA- stable, performed a collectability analysis, and confirmed they were current on payments as of June 30, 2025.

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 condensed consolidated balance sheets. Refer to see Note 4, “Real Estate Dispositions, Held for Sale, and Impairment Charges” for additional detail.
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 June 30, 2026 and December 31, 2025, respectively, excluding real estate held for sale (dollars in thousands):

June 30, 2026 December 31, 2025
Lease Intangibles Accumulated Amortization Lease Intangibles Accumulated Amortization
In-place leases $ 111,214  $ (72,768) $ 109,960  $ (69,932)
Leasing costs 107,670  (58,534) 105,468  (55,214)
Customer relationships 66,931  (41,356) 65,190  (39,893)
$ 285,815  $ (172,658) $ 280,618  $ (165,039)
Deferred Rent Receivable/(Liability) Accumulated (Amortization)/Accretion Deferred Rent Receivable/(Liability) Accumulated (Amortization)/Accretion
Above market leases $ 11,843  $ (10,364) $ 11,843  $ (10,135)
Below market leases and deferred revenue (60,362) 43,477  (57,930) 40,739 

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $3.8 million and $7.7 million, respectively, for the three and six months ended June 30, 2026 and $3.8 million and $7.2 million, respectively, for the three and six months ended June 30, 2025, and is included in depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to above-market lease values was $0.1 million and $0.2 million for the three and six months ended June 30, 2026, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2025, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income. Total amortization related to below-market lease values was $1.2 million and $2.7 million for the three and six months ended June 30, 2026, respectively, and $1.6 million and $3.2 million for the three and six months ended June 30, 2025, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

We acquired one industrial property during the six months ended June 30, 2026, and acquired ten industrial properties during the six months ended June 30, 2025. The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the six months ended June 30, 2026 and 2025, were as follows:

Intangible Assets & Liabilities June 30, 2026 June 30, 2025
In-place leases 5.9 13.9
Leasing costs 5.9 13.9
Customer relationships 5.9 18.6
Above market leases 0.0 19.4
Below market leases 5.9 10.7
All intangible assets & liabilities 5.9 15.1