INTANGIBLE LEASE ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2021

INTANGIBLE LEASE ASSETS AND LIABILITIES

INTANGIBLE LEASE ASSETS AND LIABILITIES

NOTE 11. INTANGIBLE LEASE ASSETS AND LIABILITIES

Intangible assets and liabilities consist of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their fair values. Intangible assets and liabilities consisted of the following as of March 31, 2021 and December 31, 2020 (in thousands):

	As of
	March 31, 2021		December 31, 2020
Intangible Lease Assets:
Value of In-Place Leases	$	47,271	$	44,558
Value of Above Market In-Place Leases		11,580		10,604
Value of Intangible Leasing Costs		14,313		13,285
Sub-total Intangible Lease Assets		73,164		68,447
Accumulated Amortization		(19,949)		(18,271)
Sub-total Intangible Lease Assets—Net		53,215		50,176
Intangible Lease Liabilities (included in accrued and other liabilities):
Value of Below Market In-Place Leases		(36,655)		(36,817)
Sub-total Intangible Lease Liabilities		(36,655)		(36,817)
Accumulated Amortization		13,259		12,654
Sub-total Intangible Lease Liabilities—Net		(23,396)		(24,163)
Total Intangible Assets and Liabilities—Net	$	29,819	$	26,013

During the three months ended March 31, 2021, the value of in-place leases increased by $2.7 million, the value of above-market in-place leases increased by $1.0 million, the value of intangible leasing costs increased by $1.0 million, and the value of below-market in-place leases increased by $0.2 million. Such increases reflect 2021 acquisitions, net of 2021 dispositions and the transference of one single-tenant income property transferred to held for sale as of March 31, 2021. Net accumulated amortization decreased by $1.1 million, for a net increase during the three months ended March 31, 2021 of $3.8 million.

As of March 31, 2021 and December 31, 2020, $19.3 million and $19.9 million, respectively, of the total below market in-place lease value is related to Wells Fargo Raleigh, which was acquired on November 18, 2015.

The following table reflects the net amortization of intangible assets and liabilities during the three months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended
	March 31, 2021		March 31, 2020
Amortization Expense	$	1,827	$	1,881
Increase to Income Properties Revenue		(396)		(474)
Net Amortization of Intangible Assets and Liabilities	$	1,431	$	1,407

The estimated future amortization expense (income) related to net intangible assets and liabilities is as follows (in thousands):

Year Ending December 31,	Future Amortization Amount		Future Accretion to Income Property Revenue		Net Future Amortization of Intangible Assets and Liabilities
Remainder of 2021	$	5,678	$	(1,152)	$	4,526
2022		7,308		(1,612)		5,696
2023		7,167		(1,614)		5,553
2024		7,132		(1,529)		5,603
2025		5,160		(1,475)		3,685
2026 and thereafter		12,019		(7,263)		4,756
Total	$	44,464	$	(14,645)	$	29,819

As of March 31, 2021, the weighted average amortization period of total intangible assets and liabilities was 8.5 years and 12.9 years, respectively.