Operating Real Estate

9 Months Ended

Sep. 30, 2020

The following table presents operating real estate, net (dollars in thousands):


	September 30, 2020 (Unaudited)		December 31, 2019
Land	$	236,036	$	236,036
Land improvements	23,700		23,287
Buildings and improvements	1,466,252		1,551,113
Tenant improvements	16,041		14,642
Construction in progress	1,593		4,956
Furniture, fixtures and equipment	106,408		100,998
Subtotal	$	1,850,030	$	1,931,032
Less: Accumulated depreciation	(278,334)		(230,814)
Operating real estate, net	$	1,571,696	$	1,700,218

For the three and nine months ended September 30, 2020 depreciation expense was $15.5 million and $47.5 million, respectively. For the three and nine months ended September 30, 2019, depreciation expense was $15.7 million and $46.8 million, respectively.

Within the table above, buildings and improvements have been reduced by impairment totaling $148.7 million and $58.0 million as of September 30, 2020 and December 31, 2019, respectively. Impairment loss, as presented on the consolidated statements of operations, totaled $91.4 million and $10.1 million for the nine months ended September 30, 2020 and 2019, respectively. Refer to Note 2, “Summary of Significant Accounting Policies” for further discussion.

Net lease rental properties owned as of September 30, 2020 have current lease expirations ranging from 2022 to 2029, with certain tenant renewal rights. These net lease arrangements require the tenant to pay rent and substantially all the expenses of the leased property including maintenance, taxes, utilities and insurance. For certain properties, the tenants pay the Company, in addition to the contractual base rent, their pro rata share of real estate taxes and operating expenses. The Company’s net lease agreements provide for periodic rental increases based on the greater of certain percentages or increase in the consumer price index.