Provision for Impairment of Investment Properties

9 Months Ended

Sep. 30, 2020

Impairment or Disposal of Tangible Assets Disclosure [Abstract]

Provision for Impairment of Investment Properties

PROVISION FOR IMPAIRMENT OF INVESTMENT PROPERTIES

As of September 30, 2020 and 2019, the Company identified indicators of impairment at certain of its properties. Such indicators included a low occupancy rate, difficulty in leasing space and related cost of re-leasing, significant exposure to financially troubled tenants or reduced anticipated holding periods. The following table summarizes the results of these analyses as of September 30, 2020 and 2019:

	September 30, 2020		September 30, 2019
Number of properties for which indicators of impairment were identified	3		2		(a)
Less: number of properties for which an impairment charge was recorded	1		1
Less: number of properties that were held for sale as of the date the analysis was performed for which indicators of impairment were identified but no impairment charge was recorded	—		—
Remaining properties for which indicators of impairment were identified but no impairment charge was considered necessary	2		1
Weighted average percentage by which the projected undiscounted cash flows exceeded its respective carrying value for each of the remaining properties (b)	141	%	20	%

(a)Includes one property which has subsequently been sold as of September 30, 2020.

(b)Based upon the estimated holding period for each asset where an undiscounted cash flow analysis was performed.

The Company recorded the following investment property impairment charges during the nine months ended September 30, 2020:

Property Name	Property Type	Impairment Date	Square Footage	Provision for Impairment of Investment Properties
King Philip’s Crossing (a)	Multi-tenant retail	February 13, 2020	105,900	$	346
Streets of Yorktown (b)	Multi-tenant retail	September 30, 2020	85,200	2,279
				$	2,625
	Estimated fair value of impaired properties as of impairment date			$	14,144

(a)The Company recorded an impairment charge on December 31, 2019 based upon the terms and conditions of an executed sales contract. This property was sold on February 13, 2020, at which time additional impairment was recognized pursuant to the terms and conditions of an executed sales contract.

(b)The Company recorded an impairment charge as a result of a combination of factors, including expected impact on future operating results stemming from changes in lease terms related to the tenant population and a change in expected hold period.

The Company recorded the following investment property impairment charge during the nine months ended September 30, 2019:

Property Name	Property Type	Impairment Date	Square Footage	Provision for Impairment of Investment Properties
Streets of Yorktown (a)	Multi-tenant retail	September 30, 2019	85,200	$	11,177
				$	11,177
	Estimated fair value of impaired property as of impairment date			$	5,300

(a)The Company recorded an impairment charge as a result of a combination of factors, including expected impact on future operating results stemming from anticipated changes in lease terms related to the tenant population and a re-evaluation of the strategic alternatives for the property.

The extent to which COVID-19 impacts the Company and its tenants will depend, in part, on future developments, which are highly uncertain and cannot be predicted with confidence. If the effects of COVID-19 cause economic and market conditions to continue to deteriorate or if the Company’s expected holding period for assets change, subsequent tests for impairment could result in impairment charges in the future. As of September 30, 2020, the Company does not consider the impacts of COVID-19, including tenant requests for lease concessions, to be impairment indicators. However, indications of a tenant’s inability to continue as a going concern, changes in the Company’s view or strategy relative to a tenant’s business or industry as

a result of COVID-19, or changes in the Company’s long-term hold strategies could change in future periods. The Company will continue to monitor circumstances and events in future periods and can provide no assurance that material impairment charges with respect to its investment properties will not occur in future periods.