REAL ESTATE INVESTMENTS, NET AND INTANGIBLE ASSETS AND LIABILITIES, NET

12 Months Ended

Dec. 31, 2024

REAL ESTATE INVESTMENTS, NET AND INTANGIBLE ASSETS AND LIABILITIES, NET

NOTE 4 – REAL ESTATE INVESTMENTS, NET AND INTANGIBLE ASSETS AND LIABILITIES, NET

Real Estate Investments

Real estate investments, net, which consist of land, buildings and improvements leased to others subject to net operating leases and those utilized in the operations of Kerrow Restaurant Operating Business is summarized as follows:


	December 31,
(In thousands)	2024			2023
Land	$	1,360,772		$	1,240,865
Buildings and improvements		1,701,522			1,572,590
Equipment		136,350			135,966
Total gross real estate investments		3,198,644			2,949,421
Less: accumulated depreciation		(775,505	)		(738,946	)
Real estate investments, net		2,423,139			2,210,475
Intangible real estate assets, net		123,613			118,027
Total Real Estate Investments and Intangible Real Estate Assets, Net	$	2,546,752		$	2,328,502

During the year ended December 31, 2024, the Company invested $273.0 million, including transaction costs, in 87 properties located in twenty-five states, and allocated the investment as follows: $119.9 million to land, $130.0 million to buildings and improvements, and $23.1 million to intangible assets. There was no contingent consideration associated with these acquisitions. These properties are 100% occupied under net leases, with a weighted average remaining lease term of 11.9 years as of December 31, 2024. During the year ended December 31, 2024, no properties were sold.

During the year ended December 31, 2023, the Company invested $341.1 million, including transaction costs, in 92 properties located in twenty-eight states, and allocated the investment as follows: $127.7 million to land, $180.8 million to buildings and improvements, and $32.6 million to intangible assets. There was no contingent consideration associated with these acquisitions. These properties were 100% occupied under net leases, with a weighted average remaining lease term of 11.8 years as of December 31, 2023. During the year ended December 31, 2023, the Company sold seven properties with a combined net book value of $23.7 million for a realized gain of $2.3 million.

During the year ended December 31, 2023, the Company exercised its option to purchase one of the properties where the Company was the lessee under the ground lease. This lease was previously accounted for as a finance lease. This purchase resulted in an increase in land and a corresponding decrease in finance lease right-of-use assets of $2.3 million.

Intangible Real Estate Assets and Liabilities, Net

The following tables detail intangible real estate assets and liabilities. Intangible real estate liabilities are included in Other liabilities on our Consolidated Balance Sheets. Acquired in-place lease intangibles are amortized over the remaining lease term as depreciation and amortization expense. Above-market and below-market leases are amortized over the initial term of the respective leases as an adjustment to rental revenue.


	December 31,
(In thousands)	2024			2023
Acquired in-place lease intangibles	$	159,693		$	136,940
Above-market leases		13,821			13,821
Lease incentives		10,108			8,224
Tenant improvements intangible		3,605			3,605
Finance lease - right of use assets		14,040			14,040
Direct lease cost		702			360
Total		201,969			176,990
Less: accumulated amortization		(78,356	)		(58,963	)
Intangible Real Estate Assets, Net	$	123,613		$	118,027


	December 31,
(In thousands)	2024			2023
Below-market leases	$	2,610		$	2,610
Less: accumulated amortization		(1,621	)		(1,414	)
Intangible Real Estate Liabilities, Net	$	989		$	1,196

The value of acquired in-place leases amortized and included in depreciation and amortization expense was $17.1 million, $16.6 million, and $13.3 million for the years ended December 31, 2024, 2023, and 2022, respectively. The value of above-market and below-market leases amortized as a net adjustment to revenue was $1.2 million, $1.3 million, and $1.6 million for the years ended December 31, 2024, 2023, and 2022, respectively. The value of lease incentives amortized as a decrease to revenue was $838 thousand, $694 thousand, and $560 thousand for the years ended December 31, 2024, 2023, and 2022, respectively.

At December 31, 2024, the total weighted average amortization period remaining for our intangible real estate assets and liabilities was 8.8 years, and the individual weighted average amortization period remaining for acquired in-place lease intangibles, above-market leases, below-market leases, lease incentive, and tenant improvement intangible was 8.6 years, 6.2 years, 10.1 years, 11.2 years and 14.2 years, respectively.

Amortization of Lease Intangibles

The following table presents the estimated net impact during the next five years and thereafter related to the amortization of in-place lease intangibles, and above-market and below-market lease intangibles for properties held in investment.


	December 31,
(In thousands)	2024
2025	$	17,341
2026		15,567
2027		13,186
2028		10,723
2029		8,645
Thereafter		35,205
Total Future Amortization Expense	$	100,667