Real Estate

12 Months Ended

Dec. 31, 2023

NOTE 4. REAL ESTATE

Investments in real estate properties consisted of the following at December 31 (dollars and square feet in thousands):


	Square Feet				Number of Buildings
	2023		2022		2023		2022		2023		2022
Operating properties:
Buildings and improvements		630,955		597,362		2,960		2,825	$	52,626,191	$	48,650,334
Improved land										22,809,306		20,388,461
Development portfolio, including land costs:
Prestabilized		13,369		4,874		45		15		1,838,805		597,553
Properties under development		26,438		44,011		85		121		2,528,650		3,614,601
Land (1)										3,775,553		3,338,121
Other real estate investments (2)										5,088,070		5,034,326
Total investments in real estate properties										88,666,575		81,623,396
Less accumulated depreciation										10,931,485		9,036,085
Net investments in real estate properties									$	77,735,090	$	72,587,311

(1)

At December 31, 2023, and 2022, our land was comprised of 8,197 and 7,188 acres, respectively.

(2)

Included in other real estate investments were: (i) land parcels we own and lease to third parties; (ii) non-strategic real estate assets, primarily acquired from the Duke Transaction, that we do not intend to operate long term; (iii) non-industrial real estate assets that we intend to redevelop as industrial properties or other higher use assets; and (iv) energy assets. Energy assets include solar panels, battery storage and mobility solutions.

At December 31, 2023, we had investments in real estate assets in the U.S. and other Americas (Brazil, Canada and Mexico), Europe (Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Slovakia, Spain, Sweden and the United Kingdom (“U.K.”)) and Asia (China, Japan, and Singapore).

Acquisitions

The following table summarizes our real estate acquisition activity, excluding the Duke Transaction as discussed in Note 3 and energy assets, for the years ended December 31 (dollars and square feet in thousands):


	2023 (1)		2022		2021 (2)
Number of operating properties		85		23		31
Square feet		17,503		5,169		6,760
Acres of land		1,620		2,218		2,684
Acquisition cost of net investments in real estate, excluding other real estate investments	$	4,194,468	$	1,828,256	$	2,517,644

Acquisition cost of other real estate investments	$	101,382	$	641,168	$	525,499

(1)

Included in 2023 is our acquisition of a real estate portfolio comprised of 70 operating properties in the U.S., aggregating 13.8 million square feet, for cash consideration of $3.1 billion.

(2)

Included in 2021 is our acquisition of additional ownership interest in certain unconsolidated other ventures that we acquired from our partners and subsequently resulted in the consolidation of the real estate assets.

Dispositions

The following table summarizes our dispositions of net investments in real estate which include contributions to unconsolidated co-investment ventures and dispositions to third parties for the years ended December 31 (dollars and square feet in thousands):


	2023		2022		2021
Dispositions of development properties and land, net (1)
Number of properties		22		21		41
Square feet		8,437		7,676		16,482
Net proceeds	$	1,449,644	$	1,398,585	$	2,629,750
Gains on dispositions of development properties and land, net	$	462,270	$	597,745	$	817,017

Other dispositions of investments in real estate, net (2)
Number of properties		25		103		97
Square feet		2,794		8,718		20,806
Net proceeds	$	641,214	$	1,271,639	$	2,536,622
Gains on other dispositions of investments in real estate, net	$	161,039	$	589,391	$	772,570

(1)

The gains we recognize in Gains on Dispositions of Development Properties and Land, Net in the Consolidated Statements of Income are principally driven by the contribution of newly developed properties to our unconsolidated co-investment ventures and occasionally sales to a third party.

(2)

In 2023 and 2021, we sold our ownership interest in unconsolidated joint ventures. The net proceeds and gains from these transactions are included in the table.

Leases

As a Lessor

We lease our real estate properties to customers under agreements that are classified primarily as operating leases. We recognize the total minimum lease payments provided for under the leases on a straight-line basis over the lease term. Our weighted average lease term remaining was 52 months based on square feet for all leases in effect at December 31, 2023.

The following table summarizes the minimum lease payments due from our customers on leases for space in our operating properties, prestabilized and under development properties, other real estate investments and assets held for sale or contribution at December 31, 2023 (in thousands):



2024	$	4,985,561
2025		4,793,495
2026		4,250,129
2027		3,514,299
2028		2,753,907
Thereafter		10,201,357
Total	$	30,498,748

These amounts do not reflect future rental revenue from the renewal or replacement of existing leases and exclude reimbursements of rental expenses. These amounts also exclude rental increases that are not fixed.

As a Lessee

We had approximately 135 land and office space leases in which we were the lessee at both December 31, 2023 and 2022, which primarily qualify as operating leases with remaining lease terms of 1 to 74 years at December 31, 2023. Our lease liabilities were $597.6 million and $638.8 million at December 31, 2023, and 2022, respectively.

The following table summarizes the fixed, future minimum rental payments, excluding variable costs, for leases that had commenced at December 31, 2023, with amounts discounted at lease commencement by our incremental borrowing rates to calculate the lease liabilities of our leases (in thousands):



2024	$	75,926
2025		62,009
2026		51,669
2027		46,372
2028		38,848
Thereafter		1,110,251
Total undiscounted rental payments		1,385,075
Less imputed interest		787,512
Total lease liabilities	$	597,563

The weighted average remaining lease term for these leases was 30 years and 31 years at December 31, 2023, and 2022, respectively. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. We assigned a collateralized interest rate to each lease based on the term of the lease and the currency in which the lease was denominated. The weighted average discount rate was 3.6% and 3.4% at December 31, 2023, and 2022, respectively.