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Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
OPERATING ACTIVITIES    
Net income $ 32,270 $ 24,403
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation of buildings and tenant improvements 31,565 27,233
Amortization of leasing costs, in-place lease intangibles and below market ground rents - operating leases 10,667 11,641
Accrued straight-line rental revenue (3,434) (2,893)
Amortization of leasing incentives and above or below-market rents (593) (287)
Amortization of right-of-use assets - finance leases 440 230
Accrued straight-line ground rent expense 54 (10)
Unrealized credit loss provision 227 0
Adjustment for uncollectable lease accounts 3,195 220
Noncash stock compensation 1,907 1,339
Impairment charges 205 0
Noncash interest expense 1,499 898
Interest expense on finance leases 686 340
Gain on real estate dispositions (6,388) (4,699)
Adjustment for Annapolis Junction loan discount amortization [1] 0 (3,727)
Change in fair value of derivatives and other 1,424 3,926
Equity in income of unconsolidated real estate entities 0 (273)
Changes in operating assets and liabilities:    
Property assets (6,642) (4,225)
Property liabilities 3,356 2,623
Construction assets (8,328) (3,452)
Construction liabilities 18,824 (642)
Interest receivable (13,167) (7,118)
Net cash provided by operating activities 67,767 45,527
INVESTING ACTIVITIES    
Development of real estate investments (52,157) (107,458)
Tenant and building improvements (8,195) (16,889)
Acquisitions of real estate investments, net of cash received (34,785) (133,345)
Dispositions of real estate investments, net of selling costs 96,458 32,468
Notes receivable issuances (17,687) (44,531)
Notes receivable paydowns 16,220 16,965
Leasing costs (2,438) (2,569)
Leasing incentives (1,289) 0
Contributions to equity method investments 0 (535)
Net cash used for investing activities (3,873) (255,894)
FINANCING ACTIVITIES    
Proceeds from issuance of cumulative redeemable perpetual preferred stock, net 101,460 61,001
Proceeds from issuance of common stock, net 7,387 71,749
Common shares tendered for tax withholding (534) (344)
Debt issuances, credit facility and construction loan borrowings 81,004 349,157
Debt and credit facility repayments, including principal amortization (181,182) (200,879)
Debt issuance costs (326) (3,225)
Dividends and distributions (36,058) (43,537)
Net cash provided by (used for) financing activities (28,249) 233,922
Net increase in cash and cash equivalents 35,645 23,555
Cash, cash equivalents, and restricted cash, beginning of period 43,579 24,051
Cash, cash equivalents, and restricted cash, end of period [2] 79,224 47,606
Supplemental Disclosures (noncash transactions):    
(Decrease) increase in dividends and distributions payable (5,817) 3,949
(Decrease) increase in accrued capital improvements and development costs (12,564) (13,204)
Note payable issued in acquisition of noncontrolling interest in real estate investment 6,130 0
Issuance of operating partnership units for acquisitions 67 71,115
Operating Partnership units redeemed for common shares 8,530 2,700
Note payable recorded for mandatorily redeemable partnership interest 3,829 0
Debt assumed at fair value in conjunction with real estate purchases 22,512 101,390
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 (3) [3] 0 33,965
Recognition of operating lease liabilities (3) [3] 0 41,631
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):
 
 
September 30, 2020
 
September 30, 2019
Cash and cash equivalents
 
$
73,579

 
$
44,195

Restricted cash (a)
 
5,645

 
3,411

Cash, cash equivalents, and restricted cash
 
$
79,224

 
$
47,606


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

[3] Amounts attributable to 2019 are net of $0.4 million disposal related to the Company's preexisting lease at the Thames Street Wharf property acquired on June 26, 2019.