PROPERTY PORTFOLIO

6 Months Ended

Jun. 30, 2023

PROPERTY PORTFOLIO

PROPERTY PORTFOLIO

NOTE 3. PROPERTY PORTFOLIO

As of June 30, 2023, the Company’s property portfolio consisted of 143 properties with total square footage of 3.9 million.

Leasing revenue consists of long-term rental revenue from net leased commercial properties, which is recognized as earned, using the straight-line method over the life of each lease. Lease payments below include straight-line base rental revenue as well as the non-cash accretion of above and below market lease amortization. The variable lease payments are comprised of percentage rent payments and reimbursements from tenants for common area maintenance, insurance, real estate taxes, and other operating expenses.

The components of leasing revenue are as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Lease Income
Lease Payments	$	9,975	$	10,160	$	20,138	$	19,891
Variable Lease Payments		1,464		1,120		2,467		2,188
Total Lease Income	$	11,439	$	11,280	$	22,605	$	22,079

Minimum Future Rental Receipts. Minimum future rental receipts under non-cancelable operating leases, excluding percentage rent and other lease payments that are not fixed and determinable, having remaining terms in excess of one year subsequent to June 30, 2023, are summarized as follows (in thousands):  

Year Ending December 31,	Amounts
Remainder of 2023	$	19,720
2024		38,648
2025		36,917
2026		35,994
2027		32,617
2028		28,734
2029 and Thereafter (Cumulative)		101,338
Total	$	293,968

2023 Activity. During the six months ended June 30, 2023, the Company acquired 9 properties for a combined purchase price of $60.5 million, or a cost of $61.6 million including capitalized acquisition costs. The properties are located in four different states, leased to 14 different tenants, and had a weighted average remaining lease term of 7.5 years at the time of acquisition. Of the total acquisition cost, $16.4 million was allocated to land, $40.2 million was allocated to buildings and improvements, $5.5 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees, and above market lease value, and $0.5 million was allocated to intangible liabilities for the below market lease value. The weighted average amortization period for the intangible assets and liabilities was 8.8 years at acquisition.

During the six months ended June 30, 2023, the Company sold 14 properties for an aggregate sales price of $79.1 million, generating aggregate gains on sale of $5.2 million. Five properties were classified as held for sale as of June 30, 2023.

2022 Activity. During the six months ended June 30, 2022, the Company acquired 35 properties for a combined purchase price of $109.1 million, or a total cost of $110.0 million including capitalized acquisition costs. The properties are located in 17 states, leased to 12 different tenants, and had a weighted average remaining lease term of 9.4 years at the time of acquisition. Of the total acquisition cost, $31.1 million was allocated to land, $67.0 million was allocated to

buildings and improvements, $13.1 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees, and above market lease value, and $1.2 million was allocated to intangible liabilities for the below market lease value. The weighted average amortization period for the intangible assets and liabilities was 9.7 years at acquisition.

During the six months ended June 30, 2022, the Company sold five properties for an aggregate sales price of $72.8 million, generating aggregate gains on sale of $15.6 million. One property was classified as held for sale as of June 30, 2022.