Quarterly report [Sections 13 or 15(d)]

Real Estate and Intangible Assets

v3.26.3
Real Estate and Intangible Assets
 9 Months Ended
Sep. 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 September 30, 2026 and December 31, 2025, respectively, excluding real estate held for sale (dollars in thousands):
September 30, 2026 December 31, 2025
Real estate:
Land (1) $ 152,052  $ 150,873 
Building and improvements 1,217,829  1,183,036 
Tenant improvements 57,750  56,536 
Accumulated depreciation (393,032) (359,513)
Real estate, net $ 1,034,599  $ 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 $11.4 million and $33.5 million, respectively, for the three and nine months ended September 30, 2026. Real estate depreciation expense on building and tenant improvements was $10.8 million and $31.1 million, respectively, for the three and nine months ended September 30, 2025.

Acquisitions

We acquired two industrial properties during the nine months ended September 30, 2026, and we acquired 19 industrial properties during the nine months ended September 30, 2025. The acquisitions are summarized below (dollars in thousands):

Nine Months Ended September 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 
Red Bud, IL 1 July 28, 2026 146,650  8.4 years 6,690  140 
2 300,540  6.6 years $ 29,694  $ 394 

Nine Months Ended September 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-Fort Worth, 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 
Cartersville, GA 1 September 30, 2025 117,430  20.0 years 12,195  56 
Ossian, IN 1 September 30, 2025 263,756  20.0 years 19,531  56 
Ligonier, IN 1 September 30, 2025 159,277  20.0 years 10,641  56 
Caro, MI 4 September 30, 2025 86,751  20.0 years 5,823  58 
Chesterfield, MI 1 September 30, 2025 39,701  20.0 years 4,747  57 
Cass City, MI 1 September 30, 2025 26,321  20.0 years 1,901  55 
19 1,568,107  15.9 years $ 207,905  $ 1,205 

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

Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025
Acquired assets and liabilities Purchase price Purchase price
Land $ 2,039  $ 13,107  (1)
Building 21,344  160,301 
Tenant Improvements 1,448  2,293 
In-place Leases 1,910  14,739 
Leasing Costs 853  14,416 
Customer Relationships 2,144  5,636 
Above Market Leases 72  905  (2)
Below Market Leases (116) (3,492) (3)
Total Purchase Price $ 29,694  $ 207,905 

(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 of loans receivable included in Other assets on the condensed consolidated balance sheets related to sale-leaseback acquisitions.
(3)This amount includes $1,627 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 three 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
Three Months Ending December 31, 2026 $ 34,717 
2027 130,293 
2028 122,038 
2029 116,085 
2030 107,776 
2031 99,708 
Thereafter 510,402 

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 nine months ended September 30, 2026 and 2025, respectively (dollars in thousands):

For the three months ended September 30,
Lease revenue reconciliation 2026 2025 $ Change % Change
Fixed lease payments $ 36,813  $ 35,464  $ 1,349  3.8  %
Variable lease payments 5,606  5,377  229  4.3  %
$ 42,419  $ 40,841  $ 1,578  3.9  %

For the nine months ended September 30,
Lease revenue reconciliation 2026 2025 $ Change % Change
Fixed lease payments $ 112,450  $ 102,240  $ 10,210  10.0  %
Variable lease payments 15,867  15,635  232  1.5  %
$ 128,317  $ 117,875  $ 10,442  8.9  %

Sales-Type Leases

There was no sales-type lease activity in the three and nine months ended September 30, 2026. During the nine months ended September 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 nine months ended September 30, 2025, the interest income earned from the sales-type lease of $0.5 million was included in other income in the condensed consolidated statements of operations. There was no interest income earned from sales-type leases in the three months ended September 30, 2025. In developing the expected credit loss, we reviewed the tenant’s credit rating,
which was AA- stable, performed a collectability analysis, and confirmed they were current on payments as of September 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 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 September 30, 2026 and December 31, 2025, respectively, excluding real estate held for sale (dollars in thousands):

September 30, 2026 December 31, 2025
Lease Intangibles Accumulated Amortization Lease Intangibles Accumulated Amortization
In-place leases $ 111,538  $ (74,202) $ 109,960  $ (69,932)
Leasing costs 109,348  (60,286) 105,468  (55,214)
Customer relationships 67,000  (42,158) 65,190  (39,893)
$ 287,886  $ (176,646) $ 280,618  $ (165,039)
Deferred Rent Receivable/(Liability) Accumulated (Amortization)/Accretion Deferred Rent Receivable/(Liability) Accumulated (Amortization)/Accretion
Above market leases $ 11,915  $ (10,480) $ 11,843  $ (10,135)
Below market leases and deferred revenue (60,536) 44,202  (57,930) 40,739 

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $4.0 million and $11.7 million, respectively, for the three and nine months ended September 30, 2026, and $4.5 million and $11.7 million, respectively, for the three and nine months ended September 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 $0.3 million for the three and nine months ended September 30, 2026, respectively, and $0.1 million and $0.4 million for the three and nine months ended September 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 $0.7 million and $3.5 million for the three and nine months ended September 30, 2026, respectively, and $1.7 million and $5.0 million for the three and nine months ended September 30, 2025, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

We acquired two industrial properties during the nine months ended September 30, 2026, and acquired 19 industrial properties during the nine months ended September 30, 2025. The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the nine months ended September 30, 2026 and 2025, were as follows:

Intangible Assets & Liabilities September 30, 2026 September 30, 2025
In-place leases 7.4 18.2
Leasing costs 7.4 18.2
Customer relationships 11.1 22.9
Above market leases 8.4 19.7
Below market leases 5.9 18.4
All intangible assets & liabilities 8.2 19.4