Rental Property (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of components of rental property

The following table summarizes the components of rental property as of September 30, 2017 and December 31, 2016.



Rental Property (in thousands)	September 30, 2017			December 31, 2016
Land	$	321,365		$	272,162
Buildings, net of accumulated depreciation of $152,575 and $125,971, respectively	1,695,332		⁽¹⁾	1,408,406		⁽¹⁾
Tenant improvements, net of accumulated depreciation of $32,075 and $28,388, respectively	30,895			24,974
Building and land improvements, net of accumulated depreciation of $49,699 and $33,054, respectively	134,607			107,463
Construction in progress	19,516			9,298
Deferred leasing intangibles, net of accumulated amortization of $273,602 and $237,456, respectively	318,915			294,533
Total rental property, net	$	2,520,630		$	2,116,836


(1)	Includes one building in redevelopment.

Schedule of real estate properties acquired

The following table summarizes the acquisitions of the Company during the three and nine months ended September 30, 2017.



Location of Property	Square Feet	Buildings	Purchase Price (in thousands)
Jacksonville, FL	1,025,720	4	$	34,264
Sparks, NV	174,763	1	8,380
Salisbury, NC	288,000	1	8,250
Franklin Township, NJ	183,000	1	12,800
Milford, CT	200,000	1	12,762
Bedford Heights, OH	173,034	1	7,622
Redford, MI	135,728	1	7,769
Warren, MI	154,377	1	7,940
Three months ended March 31, 2017	2,334,622	11	99,787
Waukegan, IL	261,075	2	13,850
Gaffney, SC	226,968	1	7,200
Dayton, OH	569,966	1	29,750
Belvidere, IL	336,204	1	22,867
San Diego, CA	205,440	1	19,362
Edwardsville, KS	270,869	1	16,270
Pedricktown, NJ	245,749	1	16,000
Walton, KY	224,921	1	11,450
Rock Hill, SC	275,000	1	6,675
Laredo, TX	206,810	1	13,500
Clinton, PA	297,200	1	23,650
Batavia, IL	102,500	1	5,900
Wallingford, CT	105,000	1	8,200
Rockwall, TX	389,546	1	28,600
Houston, TX	232,800	3	25,000
Lebanon, PA	211,358	1	7,950
Maple Grove, MN	108,628	1	10,031
Romulus, MI	303,760	1	19,351
Three months ended June 30, 2017	4,573,794	21	285,606
Stone Mountain, GA	78,000	1	4,175
York, PA	382,886	1	18,981
Pittston, PA	437,446	1	23,950
O'Fallon, MO	109,854	1	5,740
Belleville, MI	160,464	1	8,641
Columbus, OH	147,645	1	6,954
Groveport, OH	320,657	1	13,643
Las Vegas, NV	34,916	1	4,642
Mooresville, NC	499,200	1	25,750
Swedesboro, NJ	123,962	1	7,250
Three months ended September 30, 2017	2,295,030	10	119,726
Nine months ended September 30, 2017	9,203,446	42	$	505,119

Summary of allocation of the consideration paid for the acquired assets and liabilities in connection with the acquisition of buildings at the date of acquisition

The following table summarizes the allocation of the consideration paid at the date of acquisition during the nine months ended September 30, 2017 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.



Acquired Assets and Liabilities	Purchase Price (in thousands)			Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	$	52,453		N/A
Buildings	335,391			N/A
Tenant improvements	8,288			N/A
Building and land improvements	26,962			N/A
Deferred leasing intangibles - In-place leases	51,444			8.3
Deferred leasing intangibles - Tenant relationships	21,749			10.7
Deferred leasing intangibles - Above market leases	13,063			10.8
Deferred leasing intangibles - Below market leases	(4,231		)	8.8
Total purchase price	$	505,119

Schedule of pro forma information for acquired properties

The table below sets forth the results of operations for the three and nine months ended September 30, 2017, for the buildings acquired during the nine months ended September 30, 2017, included in the Company’s Consolidated Statements of Operations from the date of acquisition.



Results of Operations (in thousands)	Three months ended September 30, 2017		Nine months ended September 30, 2017
Total revenue	$	9,206	$	14,817
Property acquisition costs	$	1,309	$	4,517
Net income (loss)	$	332	$	(2,767	)

The following tables set forth pro forma information for the nine months ended September 30, 2017 and September 30, 2016. The below pro forma information does not purport to represent what the actual results of operations of the Company would have been had the acquisitions occurred on the first day of the applicable reporting period, nor do they purport to predict the results of operations of future periods. The pro forma information has not been adjusted for property sales.



Pro Forma (in thousands)⁽¹⁾	Nine months ended September 30, 2017		Nine months ended September 30, 2016
Total revenue	$	237,683	$	223,024
Net income (loss)⁽²⁾	$	30,745	$	(8,418	)
Net income (loss) attributable to common stockholders	$	22,161	$	(18,643	)


(1)	The unaudited pro forma information for the nine months ended September 30, 2017 and September 30, 2016 is presented as if the buildings acquired during the nine months ended September 30, 2017 and September 30, 2016 were completed on January 1, 2016 and January 1, 2015, respectively.

(2)

The net income for the nine months ended September 30, 2017 excludes approximately $4.5 million of property acquisition costs related to the acquisition of buildings that closed during the nine months ended September 30, 2017, and the net loss for the nine months ended September 30, 2016 was adjusted to include these acquisition costs. Net loss for the nine months ended September 30, 2016 excludes approximately $2.7 million of property acquisition costs related to the acquisition of buildings that closed during the nine months ended September 30, 2016.

Schedule of Finite-Lived Intangible Assets and Below Market Leases

The following table sets forth the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016.



	September 30, 2017							December 31, 2016
Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Above market leases	$	79,614	$	(36,310	)	$	43,304	$	70,668	$	(32,868	)	$	37,800
Other intangible lease assets	512,903		(237,292		)	275,611		461,321		(204,588		)	256,733
Total deferred leasing intangible assets	$	592,517	$	(273,602	)	$	318,915	$	531,989	$	(237,456	)	$	294,533

Below market leases	$	33,614	$	(12,487	)	$	21,127	$	30,791	$	(10,450	)	$	20,341
Total deferred leasing intangible liabilities	$	33,614	$	(12,487	)	$	21,127	$	30,791	$	(10,450	)	$	20,341

The following table sets forth the amortization expense and the net decrease to rental income for the amortization of deferred leasing intangibles during the three and nine months ended September 30, 2017 and September 30, 2016.



	Three months ended September 30,				Nine months ended September 30,
Deferred Leasing Intangibles Amortization (in thousands)	2017		2016		2017		2016
Net decrease to rental income related to above and below market lease amortization	$	1,318	$	1,564	$	3,873	$	4,751
Amortization expense related to other intangible lease assets	$	17,934	$	16,594	$	53,747	$	48,853

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table sets forth the amortization of deferred leasing intangibles over the next five calendar years beginning with 2017 as of September 30, 2017.



Year	Amortization Expense Related to Other Intangible Lease Assets (in thousands)		Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)
Remainder of 2017	$	18,040	$	1,322
2018	$	62,037	$	4,330
2019	$	47,856	$	3,736
2020	$	37,759	$	3,326
2021	$	27,703	$	1,945

Below Market Lease, Future Amortization Income

The following table sets forth the amortization of deferred leasing intangibles over the next five calendar years beginning with 2017 as of September 30, 2017.



Year	Amortization Expense Related to Other Intangible Lease Assets (in thousands)		Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)
Remainder of 2017	$	18,040	$	1,322
2018	$	62,037	$	4,330
2019	$	47,856	$	3,736
2020	$	37,759	$	3,326
2021	$	27,703	$	1,945