Real Estate Assets and Discontinued Operations

9 Months Ended

Sep. 30, 2022

Real Estate Assets And Discontinued Operations

Real Estate Assets And Discontinued Operations

4.    Real Estate Assets and Discontinued Operations

Real estate assets consist of:

	Estimated
	Useful Lives	September 30, 2022		December 31, 2021
Land		$	71,155	$	55,104
Land improvements	10 to 30 years		72,198		65,520
Buildings and improvements	10 to 40 years		349,962		295,964
Tenant improvements	Shorter of useful life or terms of related lease		30,249		31,576
Construction in progress			45,992		20,799
Development costs			3,831		3,673
			573,387		472,636
Accumulated depreciation			(93,826)		(84,989)
		$	479,561	$	387,647

Total depreciation expense related to real estate assets was as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Depreciation expense	$	4,187	$	3,126	$	11,577	$	8,571

On June 8, 2022, INDUS closed on the purchase of an approximately 205,000 square foot, fully leased portfolio in Florida for $31,652, including transaction costs. This portfolio is comprised of two buildings in the Palm Beach market totaling approximately 84,000 square feet and an approximately 121,000 square foot property in the Orlando market.

On January 19, 2022, INDUS closed on the purchase of 782 Paragon Way, an approximately 217,000 square foot, fully leased building in the Charlotte, North Carolina market for $24,026, including transaction costs.

The purchase prices for acquisitions for the nine month period ended September 30, 2022 were allocated as follows:

	782 Paragon Way		3312 Shader Road		6600 High Ridge Road		7700 High Ridge Road		Rock Hill, SC Land		Allentown, PA Land		Total
Land	$	1,469	$	2,828	$	1,673	$	2,346	$	1,121	$	6,614	$	16,051
Land improvements		329		213		194		174		—		—		910
Buildings and improvements		22,228		11,179		6,318		5,696		—		—		45,421
Tenant improvements		—		107		44		40		—		—		191
Intangible assets		—		684		421		383		—		—		1,488
Intangible liabilities		—		(186)		—		(462)		—		—		(648)
	$	24,026	$	14,825	$	8,650	$	8,177	$	1,121	$	6,614	$	63,413

In March 2022, the Company announced its intention to sell its Office/Flex Portfolio (see Note 1). The Office/Flex Portfolio is comprised of seven buildings totaling approximately 175,000 square feet located in Bloomfield, Connecticut. Additionally, INDUS intends to sell an approximately 18,000 square foot storage building that had been used in the operations of the Office/Flex Portfolio and is located within the same business park. The disposition of the Office/Flex Portfolio represents a strategic shift for the Company and, as such, is being treated as a discontinued operation as of September 30, 2022. Accordingly, for all prior periods presented, the related assets and liabilities are presented as assets and liabilities of discontinued operations on the consolidated balance sheets.

In September 2022, the Company signed a definitive agreement for the sale of the Office/Flex Portfolio at a gross purchase price of $11,000 and expects to complete the transaction in the fourth quarter of 2022.

Real estate assets in discontinued operations consist of:

	September 30, 2022		December 31, 2021
Land	$	31	$	31
Land improvements		1,844		1,840
Buildings and improvements		15,622		15,396
Tenant improvements		3,758		3,485
Construction in progress		1,771		338
		23,026		21,090
Accumulated depreciation		(14,778)		(14,571)
		8,248		6,519
Other assets		1,337		1,471
Total assets of discontinued operations	$	9,585	$	7,990
Accounts payable and accrued liabilities	$	122	$	67
Deferred revenue		581		620
Other liabilities		156		145
Total liabilities of discontinued operations	$	859	$	832

In the three months ended September 30, 2021, the Company recorded an impairment charge of $3,000 to reduce the carrying values of two of its office/flex properties in Windsor, Connecticut, based on management’s assessment of the current market prices for those properties. Both of those properties were sold in the fourth quarter of 2021.