Acquired Intangible Assets and Liabilities

9 Months Ended

Sep. 30, 2020

Acquired Intangible Assets and Liabilities

Acquired Intangible Assets and Liabilities

7. Acquired Intangible Assets and Liabilities

The following summarizes our acquired intangible assets (real estate intangibles, comprised of acquired in-place lease value and customer relationship value along with acquired above-market lease value) and intangible liabilities (acquired below-market lease value) as of September 30, 2020 and December 31, 2019.

	Balance as of
(Amounts in thousands)	September 30, 2020		December 31, 2019
Real Estate Intangibles:
Customer relationship value:
Gross amount (1)	$	2,938,308	$	1,845,949
Accumulated amortization		(526,657)		(400,570)
Net	$	2,411,651	$	1,445,379
Acquired in-place lease value:
Gross amount	$	1,375,003	$	1,357,190
Accumulated amortization		(976,121)		(899,071)
Net	$	398,882	$	458,119
Acquired above-market leases:
Gross amount	$	278,094	$	279,048
Accumulated amortization		(228,014)		(204,233)
Net	$	50,080	$	74,815
Acquired below-market leases:
Gross amount	$	398,870	$	396,509
Accumulated amortization		(263,606)		(247,735)
Net	$	135,264	$	148,774

(1) Balance as of September 30, 2020 includes amounts from Interxion Combination (see Note 3).

Amortization of customer relationship value (a component of depreciation and amortization expense) was approximately $49.7 million and $30.7 million for the three months ended September 30, 2020 and 2019, respectively, and approximately $128.5 million and $99.3 million for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, the weighted average remaining contractual life for customer relationship value was 14.9 years. Estimated annual amortization of customer relationship value for each of the five succeeding years and thereafter, commencing October 1, 2020 is as follows:

(Amounts in thousands)
Remainder of 2020	$	43,850
2021		174,593
2022		173,822
2023		173,153
2024		172,573
Thereafter		1,673,660
Total	$	2,411,651

Amortization of acquired in-place lease value (a component of depreciation and amortization expense) was approximately $25.4 million and $32.4 million for the three months ended September 30, 2020 and 2019, respectively, and approximately $82.4 million and $114.7 million for the nine months ended September 30, 2020 and 2019, respectively. The expected average amortization period for acquired in-place lease value is 5.8 years as of September 30, 2020. The weighted average remaining contractual life for acquired leases excluding renewals or extensions is 5.6 years as of September 30, 2020. Estimated annual amortization of acquired in-place lease value for each of the five succeeding years and thereafter, commencing October 1, 2020 is as follows:

(Amounts in thousands)
Remainder of 2020	$	22,209
2021		79,472
2022		59,787
2023		48,632
2024		41,448
Thereafter		147,334
Total	$	398,882

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in a decrease in rental revenues of $(2.4) million and $(2.8) million for the three months ended September 30, 2020 and 2019, respectively, and approximately $(8.7) million and $(13.0) million for the nine months ended September 30, 2020 and 2019, respectively. The expected average remaining lives for acquired below-market leases and acquired above-market leases is 7.4 years and 2.2 years, respectively, as of September 30, 2020. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years and thereafter, commencing October 1, 2020 is as follows:

(Amounts in thousands)
Remainder of 2020	$	(1,783)
2021		(3,347)
2022		4,880
2023		9,645
2024		10,297
Thereafter		65,492
Total	$	85,184