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Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
OPERATING ACTIVITIES    
Net income $ 21,444 $ 12,340
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation of buildings and tenant improvements 20,814 16,902
Amortization of leasing costs, in-place lease intangibles and below market ground rents - operating leases 7,242 6,507
Accrued straight-line rental revenue (1,510) (2,208)
Amortization of leasing incentives and above or below-market rents (414) (97)
Amortization of right-of-use assets - finance leases 293 85
Accrued straight-line ground rent expense 7 56
Unrealized credit loss provision 260 0
Adjustment for uncollectable lease accounts 1,486 9
Noncash stock compensation 1,451 1,017
Impairment charges 158 0
Noncash interest expense 854 589
Interest expense on finance leases 457 112
Gain on real estate dispositions (2,776) 0
Adjustment for Annapolis Junction loan discount amortization [1] 0 (2,356)
Change in fair value of interest rate derivatives 1,742 3,396
Equity in income of unconsolidated real estate entities 0 (273)
Changes in operating assets and liabilities:    
Property assets (4,544) 2,275
Property liabilities 2,932 (2,841)
Construction assets (6,556) 4,142
Construction liabilities 18,047 (4,004)
Interest receivable (11,633) (7,539)
Net cash provided by operating activities 49,754 28,112
INVESTING ACTIVITIES    
Development of real estate investments (39,854) (75,679)
Tenant and building improvements (5,003) (12,519)
Acquisitions of real estate investments, net of cash received (8,853) (133,345)
Dispositions of real estate investments, net of selling costs 89,383 1,014
Notes receivable issuances (17,599) (25,355)
Notes receivable paydowns 2,413 1,692
Leasing costs (1,656) (1,883)
Leasing incentives (1,179) 0
Contributions to equity method investments 0 (535)
Net cash used for investing activities 17,652 (246,610)
FINANCING ACTIVITIES    
Proceeds from issuance of cumulative redeemable perpetual preferred stock, net 91 61,001
Proceeds from issuance of common stock, net 5,765 37,704
Common shares tendered for tax withholding (534) (344)
Debt issuances, credit facility and construction loan borrowings 74,672 291,392
Debt and credit facility repayments, including principal amortization (80,283) (138,175)
Debt issuance costs (36) (3,167)
Dividends and distributions (35,549) (28,003)
Net cash provided by financing activities (35,874) 220,408
Net increase (decrease) in cash, cash equivalents, and restricted cash 31,532 1,910
Cash, cash equivalents, and restricted cash, beginning of period 43,579 24,051
Cash, cash equivalents, and restricted cash, end of period [2] 75,111 25,961
Supplemental Disclosures (noncash transactions):    
(Decrease) increase in dividends and distributions payable (16,173) 2,128
(Decrease) increase in accrued capital improvements and development costs (8,622) (9,861)
Note payable issued in acquisition of noncontrolling interest in real estate investment 6,130 0
Issuance of operating partnership units for acquisitions 0 69,061
Operating Partnership units redeemed for common shares 0 1,260
Debt assumed at fair value in conjunction with real estate purchases 0 101,390
Note receivable extinguished in conjunction with real estate purchase 0 31,252
Equity method investment redeemed for real estate acquisition 0 23,011
Noncontrolling interest in acquired real estate entity 0 4,870
Recognition of operating lease right-of-use assets 0 33,525
Recognition of operating lease liabilities 0 41,191
Recognition of finance lease right-of-use assets 0 24,500
Recognition of finance lease liabilities 0 17,871
De-recognition of operating lease right-of-use assets - lease termination 0 440
De-recognition of operating lease liabilities - lease termination $ 0 $ 440
[1] Borrower paid $5.0 million in 2018 in exchange for the Company's purchase option, which was accounted for as a loan modification fee; interest income was recognized as additional interest income on the note receivable over the one-year then-remaining term.
[2] The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statements of Cash Flows (in thousands):
 
 
June 30, 2020
 
June 30, 2019
Cash and cash equivalents
 
$
70,979

 
$
23,109

Restricted cash (a)
 
4,132

 
2,852

Cash, cash equivalents, and restricted cash
 
$
75,111

 
$
25,961


(a) Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements.