6. REAL ESTATE AND RELATED LEASE INTANGIBLES, NET

The following tables present additional detail related to our real estate portfolio ($ in thousands):



	June 30, 2018			December 31, 2017

Land	$	195,210		$	213,992
Building	858,503			789,622
In-place leases and other intangibles	182,905			189,490
Less: Accumulated depreciation and amortization	(176,375		)	(161,063		)
Real estate and related lease intangibles, net	$	1,060,243		$	1,032,041

Below market lease intangibles, net (other liabilities)	$	(42,416	)	$	(42,607	)

The following table presents depreciation and amortization expense on real estate recorded by the Company ($ in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017

Depreciation expense (1)	$	8,208	$	7,126	$	15,995	$	12,846
Amortization expense	2,429		2,976		5,447		5,824
Total real estate depreciation and amortization expense	$	10,637	$	10,102	$	21,442	$	18,670


(1)	Depreciation expense on the consolidated statements of income also includes $19 thousand and $23 thousand of depreciation on corporate fixed assets for the three months ended June 30, 2018 and 2017, respectively, and $37 thousand and $47 thousand of depreciation on corporate fixed assets for the six months ended June 30, 2018 and 2017, respectively.

The Company’s intangible assets are comprised of in-place leases, favorable leases compared to market leases and other intangibles. At June 30, 2018, gross intangible assets totaled $182.9 million with total accumulated amortization of $63.1 million, resulting in net intangible assets of $119.8 million, including $5.9 million of unamortized favorable lease intangibles which are included in real estate and related lease intangibles, net on the consolidated balance sheets. At December 31, 2017, gross intangible assets totaled $189.5 million with total accumulated amortization of $60.9 million, resulting in net intangible assets of $128.6 million, including $8.9 million of unamortized favorable lease intangibles which are included in real estate and related lease intangibles, net on the consolidated balance sheets. For the three and six months ended June 30, 2018, the Company recorded a net increase (reduction) in operating lease income of $(0.2) million and $(0.4) million, respectively, for amortization of above market lease intangibles acquired, compared to $(0.2) million and $(0.5) million, respectively, for the three and six months ended June 30, 2017. For the three and six months ended June 30, 2018, the Company recorded a net increase (reduction) in operating lease income of $0.7 million and $1.3 million, respectively, for amortization of below market lease intangibles acquired, compared to $0.4 million and $0.7 million, respectively, for the three and six months ended June 30, 2017.

The following table presents expected amortization expense during the next five years and thereafter related to the acquired in-place lease intangibles for property owned as of June 30, 2018 ($ in thousands):



Period Ending December 31,	Amount

2018 (last 6 months)	$	5,717
2019	10,675
2020	9,265
2021	8,662
2022	6,384
Thereafter	73,167
Total	$	113,870

There were $0.8 million and $0.9 million of unbilled rent receivables included in other assets on the consolidated balance sheets as of June 30, 2018 and December 31, 2017, respectively.

There was unencumbered real estate of $72.1 million and $128.7 million as of June 30, 2018 and December 31, 2017, respectively.

The following is a schedule of non-cancellable, contractual, future minimum rent under leases (excluding property operating expenses paid directly by tenant under net leases or rent escalations under other leases from tenants) at June 30, 2018 ($ in thousands):



Period Ending December 31,	Amount

2018 (last 6 months)	$	52,721
2019	96,832
2020	86,086
2021	83,775
2022	82,779
Thereafter	644,216
Total	$	1,046,409

Acquisitions

During the six months ended June 30, 2018, the Company acquired the following property ($ in thousands):



Acquisition Date	Type	Primary Location(s)	Purchase Price		Ownership Interest (1)

March 2018	Diversified	Lithia Springs, GA	$	24,466	70.6%
April 2018	Net Lease	Kirbyville, MO	1,156		100.0%
April 2018	Net Lease	Gladwin, MI	1,171		100.0%
April 2018	Net Lease	Foley, MN	1,176		100.0%
April 2018	Net Lease	Moscow Mills, MO	1,237		100.0%
April 2018	Net Lease	Wonder Lake, IL	1,255		100.0%
May 2018	Diversified	Isla Vista, CA	83,723		75.0%

Total			$	114,184


(1)	Properties were consolidated as of acquisition date.

On October 1, 2016, the Company early adopted ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). As a result of this adoption, acquisitions of real estate may not meet the revised definition of a business and may be treated as asset acquisitions rather than business combinations. The measurement of assets and liabilities acquired will no longer be recorded at fair value and the Company will now allocate purchase consideration based on relative fair values. Real estate acquisition costs which are no longer expensed as incurred, will be capitalized as a component of the cost of the assets acquired. During the six months ended June 30, 2018 and 2017, all acquisitions were determined to be asset acquisitions.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2018, as follows ($ in thousands):



	Purchase Price Allocation

Land	$	24,466
Building	87,389
Intangibles	3,459
Below Market Lease Intangibles	(1,130		)
Total purchase price	$	114,184

The Company recorded $1.4 million in revenues from its 2018 acquisitions for the three and six months ended June 30, 2018. The Company recorded $0.8 million in earnings (losses) from its 2018 acquisitions for the three and six months ended June 30, 2018, which is included in its consolidated statements of income.

During the six months ended June 30, 2017, the Company acquired the following properties ($ in thousands):



Acquisition Date	Type	Primary Location(s)	Purchase Price		Ownership Interest (1)

February 2017	Net Lease	Carmi, IL	$	1,411	100.0%
February 2017	Net Lease	Peoria, IL	1,183		100.0%
March 2017	Net Lease	Ridgedale, MO	1,298		100.0%
April 2017	Net Lease	Hanna City, IL	1,141		100.0%
April 2017	Diversified(2)	El Monte, CA	54,110		70.0%
May 2017	Net Lease	Jessup, IA	1,163		100.0%
May 2017	Net Lease	Shelbyville, IL	1,132		100.0%
May 2017	Net Lease	Jacksonville, FL	115,641		100.0%
May 2017	Net Lease	Wabasha, MN	1,280		100.0%
May 2017	Net Lease	Port O'Connor, TX	1,255		100.0%
May 2017	Net Lease	Denver, IA	1,183		100.0%
June 2017	Net Lease	Jefferson City, MO	1,241		100.0%

Total			$	182,038


(1)	Properties were consolidated as of acquisition date.


(2)	Joint venture partner contributed $5.3 million to the partnership.

The purchase prices were allocated to the asset acquisitions during the six months ended June 30, 2017, as follows ($ in thousands):



	Purchase Price Allocation

Land	$	56,451
Building	120,567
Intangibles	31,322
Below Market Lease Intangibles	(26,302		)
Total purchase price	$	182,038

The weighted average amortization period for intangible assets acquired during the six months ended June 30, 2017 was 31.9 years. The Company recorded $1.9 million in revenues from its 2017 acquisitions for the three and six months ended June 30, 2017, which is included in its consolidated statements of income. The Company recorded $1.5 million and $1.6 million in earnings (losses) from its 2017 acquisitions for the three and six months ended June 30, 2017, respectively, which is included in its consolidated statements of income.

Sales

The Company sold the following properties during the six months ended June 30, 2018 ($ in thousands):



Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining

Various	Condominium	Las Vegas, NV	$	4,509	$	1,939	$	2,570	—	6	7
Various	Condominium	Miami, FL	3,296		2,662		634		—	12	36
March 2018	Diversified	El Monte, CA	71,807		52,610		19,197		1	—	—
March 2018	Diversified	Richmond, VA	21,632		11,396		10,236		1	—	—
Totals			$	101,244	$	68,607	$	32,637

The Company sold the following properties during the six months ended June 30, 2017 ($ in thousands):



Sales Date	Type	Primary Location(s)	Net Sales Proceeds		Net Book Value		Realized Gain/(Loss)		Properties	Units Sold	Units Remaining

Various	Condominium	Las Vegas, NV	$	7,935	$	4,371	$	3,564	—	21	38
Various	Condominium	Miami, FL	4,655		3,656		999		—	16	72
Totals			$	12,590	$	8,027	$	4,563