INCOME PROPERTIES AND LEASES

6 Months Ended

Jun. 30, 2020

INCOME PROPERTIES AND LEASES

INCOME PROPERTIES AND LEASES

NOTE 3. INCOME PROPERTIES AND LEASES

Leasing revenue consists of long-term rental revenue from retail, office, and commercial income properties, and billboards, 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 components of leasing revenue are as follows:

	Three Months Ended				Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	($000's)		($000's)		($000's)		($000's)
Leasing Revenue
Lease Payments	$	9,758	$	9,249	$	19,026	$	18,692
Variable Lease Payments		1,715		1,126		3,450		2,407
Total Leasing Revenue	$	11,473	$	10,375	$	22,476	$	21,099

Minimum future base rental revenue on non-cancelable leases subsequent to June 30, 2020, for the next five years ended December 31 are summarized as follows:

Year Ending December 31,	Amounts ($000's)
Remainder of 2020	$	9,774
2021		19,528
2022		18,602
2023		17,820
2024		17,413
2025 and thereafter (cumulative)		122,606
Total	$	205,743

See Note 1, “Description of Business and Principles of Interim Statements” for the accounting treatment of lease modifications associated with tenant rent relief requests due to the COVID-19 Pandemic.

2020 Acquisitions. During the six months ended June 30, 2020, the Company acquired two multi-tenant income properties for a purchase price of approximately $137.2 million, or an acquisition cost of approximately $137.7 million including capitalized acquisition costs. Of the total acquisition cost, approximately $46.7 million was allocated to land, approximately $74.0 million was allocated to buildings and improvements, approximately $18.8 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees, and above market lease value, and approximately $1.8 million was allocated to intangible liabilities for the below market lease value.

The properties acquired during the six months ended June 30, 2020 are described below:

Tenant Description	Tenant Type	Property Location	Date of Acquisition	Property Square-Feet	Purchase Price		Percentage Leased at Acquisition	Remaining Lease Term at Acquisition Date (in years)
Crossroads Towne Center	Multi-Tenant	Chandler, AZ	01/24/20	254,109	$	61,800,000	99%	5.0
Perimeter Place	Multi-Tenant	Atlanta, GA	02/21/20	268,572		75,435,000	80%	3.6
			Total / Weighted Average	522,681	$	137,235,000		4.2

2020 Dispositions. During the six months ended June 30, 2020, the Company disposed of four single-tenant income properties, including three ground leases, and one multi-tenant income property. See Note 24, “Subsequent Events”, for information related to the single-tenant income properties sold subsequent to June 30, 2020.  

The properties disposed of during the six months ended June 30, 2020 are described below:

Tenant Description	Tenant Type	Date of Disposition	Sales Price		Gain (Loss) on Sale		EPS, After Tax		Exit Cap Rate
CVS, Dallas, TX	Single-Tenant	04/24/20	$	15,222,000	$	854,336	$	0.14	4.50%
Wawa, Daytona Beach, FL	Single-Tenant	04/29/20		6,002,400		1,768,603		0.29	4.75%
JPMorgan Chase Bank, Jacksonville, FL	Single-Tenant	06/18/20		6,714,738		959,444		0.15	4.15%
7-Eleven, Dallas, TX	Multi-Tenant	06/26/20		2,400,000		(45,615)		(0.01)	6.08%
Bank of America, Monterey, CA	Single-Tenant	06/29/20		9,000,000		3,892,049		0.63	3.28%
		Total / Weighted Average	$	39,339,138	$	7,428,817	$	1.20	4.30%

2019 Acquisitions. During the six months ended June 30, 2019, the Company acquired five single-tenant income properties for a purchase price of approximately $40.6 million, or an acquisition cost of approximately $40.9 million including capitalized acquisition costs. Of the total acquisition cost, approximately $16.3 million was allocated to land, approximately $20.5 million was allocated to buildings and improvements, approximately $4.4 million was allocated to intangible assets pertaining to the in-place lease value, leasing fees, and above market lease value, and approximately $0.3 million was allocated to intangible liabilities for the below market lease value. The weighted average amortization period for the intangible assets and liabilities was approximately 9.5 years at acquisition.

The properties acquired during the six months ended June 30, 2019 are described below:

Tenant Description	Tenant Type	Property Location	Date of Acquisition	Property Square-Feet	Purchase Price		Percentage Leased at Acquisition	Remaining Lease Term at Acquisition Date (in years)
Hobby Lobby Stores, Inc.	Single-Tenant	Winston-Salem, NC	05/16/19	55,000	$	8,075,000	100%	10.9
24 Hour Fitness USA, Inc.	Single-Tenant	Falls Church, VA	05/23/19	46,000		21,250,000	100%	8.6
Walgreen Co.	Single-Tenant	Birmingham, AL	06/05/19	14,516		5,500,000	100%	9.8
Family Dollar Stores of Massachusetts, Inc.	Single-Tenant	Lynn, MA	06/07/19	9,228		2,100,000	100%	4.8
Walgreen Co.	Single-Tenant	Albany, GA	06/21/19	14,770		3,634,000	100%	13.6
	Total / Weighted Average			139,514	$	40,559,000		9.5

2019 Dispositions. Three multi-tenant income properties were disposed of during the six months ended June 30, 2019, as described below:

Tenant Description	Tenant Type	Date of Disposition	Sales Price		Gain on Sale		EPS, After Tax		Exit Cap Rate
Whole Foods, Sarasota, FL	Multi-Tenant	02/21/19	$	24,620,000	$	6,869,957	$	0.96	5.15%
The Grove, Winter Park, FL	Multi-Tenant	05/23/19		18,250,000		2,803,198		0.42	6.72%
3600 Peterson, Santa Clara, CA	Multi-Tenant	06/24/19		37,000,000		9,008,709		1.36	6.62%
		Total / Weighted Average	$	79,870,000	$	18,681,864	$	2.74	6.19%