Acquisitions and Dispositions

6 Months Ended

Jun. 30, 2022

Acquisitions and dispositions for the periods presented were completed in accordance with our strategy to reposition our investment concentration among the markets in which we operate and to increase our overall investment concentration in Coastal Tier 1 markets (we define "Coastal Tier 1" markets as Southern California, Northern California, Seattle, Northern New Jersey and South Florida). Transaction costs related to asset acquisitions are capitalized.

Acquisitions

The following table summarizes our real estate acquisition activities for the six months ended June 30, 2022 and 2021 (dollars in thousands):


	2022		2021
Buildings:
Number of buildings	2		4
Cash paid at time of acquisition	$	89,113	$	218,788
Land and other real estate assets:
Acres of land	334		178
Cash paid at time of acquisition (1)	$	308,554	$	223,280

(1) Includes the cash acquisition cost of other real estate investments totaling $154.3 million for the six months ended June 30, 2022. There were no acquisitions of other real estate investments for the six months ended June 30, 2021. See Note 11 for information on other real estate investments.

The following table summarizes total real estate assets recognized (in thousands), comprised of cash paid at the time of acquisition, a purchase deposit, capitalized transaction costs and below market lease liabilities, for the buildings acquired during the six months ended June 30, 2022:


Real estate assets	$	95,868
Lease related intangible assets	407
Total acquired assets	$	96,275
Below market lease liabilities	5,803

Fair Value Measurements

We determine the fair value of the individual components of real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. We have determined that these estimates primarily rely upon level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the "as-if vacant" value for acquisition activity during the six months ended June 30, 2022 are as follows:



Exit capitalization rate	4.75		%
Annual net rental rate per square foot on acquired building	$	13.80

The value that is allocated to the land underlying the acquired building relies on Level 3 inputs and is primarily determined by reference to recent comparable transactions.

Capitalized acquisition costs were insignificant and the fair value of net assets acquired from unrelated parties during the six months ended June 30, 2022, was substantially the same as the cost of acquisition.

Dispositions

Dispositions of buildings and undeveloped land generated net cash proceeds of $334.7 million and $266.0 million during the six months ended June 30, 2022 and 2021, respectively. The number of buildings sold is disclosed in Note 11.

In January 2022, we contributed the third tranche of three buildings to a 20%-owned unconsolidated joint venture. The joint venture financed the acquisition of these properties with a combination of third party first mortgage loans and equity contributions from our partner and we received $268.9 million of net cash proceeds. As part of the closing, we also received $33.6 million from our ownership share of proceeds from third party first mortgage loans, which was included in Capital Distributions from Unconsolidated Joint Ventures in the Consolidated Statements of Cash Flows for the six months ended June 30, 2022.