Acquisitions (Tables)

9 Months Ended

Sep. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of acquisitions

During the nine months ended September 30, 2021, we acquired the operating property listed below from an unrelated third party. The acquisition was funded with proceeds from the operating property disposition completed during the three months ended March 31, 2021 that were temporarily being held by a qualified intermediary, at our discretion, for the purpose of facilitating a Section 1031 Exchange. See Note 3 “Dispositions” for additional information.

Property	Date of Acquisition	Number of Buildings	Rentable Square Feet	Purchase Price (in millions) (1)
2001 West 8th Avenue, Seattle, WA	September 17, 2021	1	539,226	$	490.0

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(1)Excludes acquisition-related costs.

During the nine months ended September 30, 2021, we acquired the following development properties in two transactions from unrelated third parties. The acquisitions were funded with the proceeds from the operating property disposition completed during the three months ended March 31, 2021 that were temporarily being held by a qualified intermediary, at our discretion, for the purpose of facilitating a Section 1031 Exchange.

Property	Date of Acquisition	Submarket	Purchase Price (in millions) (1)
2045 Pacific Highway, San Diego, CA (2)	June 22, 2021	Little Italy	$	42.0
200 W. 6th Street, Austin, TX (3)	June 23, 2021	Austin CBD	580.2
Total			$	622.2

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(1)Excludes acquisition-related costs.

(2)This property was added to our future development pipeline. In connection with this acquisition, we also recorded $5.2 million of environmental remediation liabilities as of the date of acquisition, which is not included in the purchase price above.

(3)This property was added to the tenant improvement phase as it was acquired upon completion of core/shell. In connection with this acquisition, we assumed the underlying ground lease for the property and recorded a right of use ground lease asset and ground lease liability of $46.4 million. We evaluated the ground lease and concluded it met the criteria to be classified as an operating lease. The discount rate used in determining the present value of the minimum future lease payments was 3.97%. Refer to Note 11 “Commitments and Contingencies” for further discussion of the Company’s ground lease obligations.

Schedule of assets, liabilities and results of operations of acquired properties

The following table summarizes the estimated relative fair values of the assets acquired and liabilities assumed as of the date of acquisition, excluding acquisition-related costs:

	Total 2021 Operating Property Acquisition
Assets
Land and Improvements	$	84,033
Buildings and improvements (1)	370,967
Deferred leasing costs and acquisition-related intangible assets (2)	49,882
Total assets acquired	$	504,882
Liabilities
Acquisition-related intangible liabilities (3)	$	15,112
Total liabilities assumed	15,112
Net assets and liabilities acquired	$	489,770

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(1)Represents buildings, building improvements and tenant improvements

(2)Represents in-place leases (approximately $46.5 million with a weighted average amortization period of 2.2 years), leasing commissions (approximately $3.1 million with a weighted average amortization period of 3.1 years) and an above-market lease (approximately $0.3 million with a weighted average amortization period of 8.4 years).

(3)Represents below-market leases (approximately $15.1 million with a weighted average amortization period of 2.4 years).

In addition to the operating property acquisition listed above, in July 2021, we completed the acquisition of the land that was subject to a ground lease underlying our operating property at 601 108th Avenue NE in Bellevue, Washington for $47.0 million. The acquisition was funded with proceeds from the operating property disposition completed during the three months ended March 31, 2021 that were temporarily being held by a qualified intermediary, at our discretion, for the purpose of facilitating a Section 1031 Exchange.