Real Estate Assets

3 Months Ended

Mar. 31, 2021

Real Estate Assets

Real Estate Assets

4.    Real Estate Assets

Real estate assets consist of:

	Estimated
	Useful Lives	Mar. 31, 2021		Dec. 31, 2020		Nov. 30, 2020
Land		$	33,043	$	33,084	$	33,084
Land improvements	10 to 30 years		45,827		45,827		45,827
Buildings and improvements	10 to 40 years		233,264		233,250		233,250
Tenant improvements	Shorter of useful life or terms of related lease		35,009		34,899		34,899
Machinery and equipment	3 to 20 years		10,958		10,958		10,958
Construction in progress			6,835		4,036		3,613
Development costs			5,090		5,106		5,106
			370,026		367,160		366,737
Accumulated depreciation			(127,755)		(124,839)		(123,862)
		$	242,271	$	242,321	$	242,875

Total depreciation expense and capitalized interest related to real estate assets were as follows:

	For the Three Months Ended				For the Month Ended
	Mar. 31, 2021		Mar. 31, 2020		Dec. 31, 2020		Dec. 31, 2019
Depreciation expense	$	2,916	$	2,901	$	977	$	936
Capitalized interest	$	122	$	—	$	12	$	—

On February 18, 2020, INDUS, through a consolidated VIE, purchased 3320 Maggie Boulevard (“3320 Maggie”), an approximately 108,000 square foot industrial/logistics building in Orlando, Florida for $7,921, including acquisition costs. INDUS provided all of the funding to the VIE to purchase 3320 Maggie and determined that the fair value of the assets acquired approximated the purchase price, which was allocated to the real estate assets on a relative fair value basis. Of the $7,921 purchase price, $7,941 represented the relative fair value of real estate assets, $770 represented the relative fair value of the acquired intangible asset, comprised of the value of the in-place lease, and $790 represented the relative fair value of the acquired intangible liability, comprised of the value of the below market lease at the time of acquisition (see Note 9).

On March 9, 2020, INDUS, through a consolidated VIE, purchased 170 Sunport Lane (“170 Sunport”), an approximately 68,000 square foot industrial/logistics building in Orlando, Florida for $5,749, including acquisition costs. INDUS provided all of the funding to the VIE to purchase 170 Sunport and determined that the fair value of the assets acquired approximated the purchase price, which was allocated to the real estate assets on a relative fair value basis. Of the $5,749 purchase price, $5,678 represented the relative fair value of real estate assets and $71 represented the relative fair value of the acquired intangible asset, comprised of the value of leases in-place.

The acquisitions of 170 Sunport and 3320 Maggie were each made utilizing a Reverse 1031 Like-Kind Exchange. As the Company did not complete the sale transactions contemplated under the Reverse 1031 Like-Kind Exchanges within the required time, the legal titles of 170 Sunport and 3320 Maggie were transferred from the qualified intermediary to INDUS. As discussed in Note 1, INDUS retained essentially all of the legal and economic benefits and obligations and key decision-making rights related to 170 Sunport and 3320 Maggie from the respective dates they were acquired. The two VIEs that owned legal title to 170 Sunport and 3320 Maggie were included in INDUS’s consolidated financial statements as consolidated variable interest entities from the dates they were acquired through the expiration of the Reverse 1031 Like-Kind Exchanges.

On November 24, 2020 (subsequently amended on January 12, 2021 and February 5, 2021), INDUS entered into an agreement (the “Stratton Agreement”) to sell, for a purchase price of $900, its remaining sixteen lots in its residential subdivision in Suffield, Connecticut called Stratton Farms. The Stratton Agreement, as amended, provides for the sale to take place in two phases: (i) nine lots were sold on February 19, 2021 for a purchase price of $525, before

transaction costs; and (ii) seven lots are scheduled to be sold for a purchase price of $375, before transaction costs, with the closing to take place on or before August 6, 2021. There is no guarantee that the second phase of this transaction will be completed under its current terms, or at all.

See Note 11 for subsequent events related to INDUS’s real estate assets.

Real estate assets held for sale consist of:

	Mar. 31, 2021		Dec. 31, 2020		Nov. 30, 2020
Land	$	532	$	505	$	505
Land improvements		269		269		269
Development costs		5,601		6,028		6,028
	$	6,402	$	6,802	$	6,802

The decrease in real estate assets held for sale in the 2021 first quarter reflected $457 related to the residential lots sold under the first phase of the Stratton Agreement partially offset by $57 that was reclassified from real estate assets into real estate assets held for sale related to the agreement to sell approximately 91 acres of undeveloped land in Southwick, Massachusetts as well as a small land parcel that was sold subsequent to the 2021 first quarter.