Lease Intangible Assets and Liabilities

6 Months Ended

Jun. 30, 2018

Note 3 – Lease Intangible Assets and Liabilities

Lease intangible assets (acquired in-place leases, above-market leases and below-market ground leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $251.3 million and $13.4 million, respectively, as of June 30, 2018 and $310.1 million and $14.5 million, respectively, as of December 31, 2017. The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

June 30, 2018

	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	489,593	$	(254,180	)	$	235,413
Below-market ground leases, net		11,766		(609	)		11,157
Above-market leases, net		8,276		(3,543	)		4,733
Total	$	509,635	$	(258,332	)	$	251,303

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,658	$	(6,228	)	$	13,430
Total	$	19,658	$	(6,228	)	$	13,430

December 31, 2017

	Gross		Accumulated
Lease Intangible Assets	Asset		Amortization			Balance
In-place leases, net	$	542,655	$	(249,569	)	$	293,086
Below-market ground leases, net		11,766		(508	)		11,258
Above-market leases, net		8,925		(3,171	)		5,754
Total	$	563,346	$	(253,248	)	$	310,098

	Gross		Accumulated
Lease Intangible Liabilities	Liability		Amortization			Balance
Below-market leases, net	$	19,658	$	(5,182	)	$	14,476
Total	$	19,658	$	(5,182	)	$	14,476

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.2 million and $0.2 million for the three months ended June 30, 2018 and June 30, 2017, respectively, and $0.5 million and $0.5 million for the six months ended June 30, 2018 and June 30, 2017, respectively. Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

Remainder of 2018	$	(424	)
2019		(842	)
2020		(708	)
2021		(695	)
2022		(405	)

Amortization of acquired below-market ground leases resulted in additional property expense of $51 thousand for the three months ended June 30, 2018 and June 30, 2017, respectively, and $0.1 million for the six months ended June 30, 2018 and June 30, 2017, respectively. Future amortization of below-market ground leases is estimated to increase property expenses as set forth below (in thousands):

Remainder of 2018	$	101
2019		203
2020		203
2021		203
2022		203

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $35.2 million and $31.4 million for the three months ended June 30, 2018 and June 30, 2017, respectively, and $53.3 million and $75.2 million for the six months ended June 30, 2018 and June 30, 2017, respectively. Future estimated amortization of acquired in-place leases is set forth below (in thousands):

Remainder of 2018	$	54,852
2019		30,359
2020		29,913
2021		29,144
2022		28,286