Investments in Real Estate

9 Months Ended

Sep. 30, 2025

A. Acquisitions of Real Estate

Below is a summary of our acquisitions for the nine months ended September 30, 2025 (unaudited):


	Number of Properties	Investment ($ in millions)			Weighted Average Lease Term (Years)
Acquisitions
U.S. real estate	108	$	703.3		15.4
Europe real estate	46	2,024.0			8.6
Total real estate acquisitions	154	$	2,727.3		10.3
Initial weighted average cash yield (1)		7.1		%
Real estate properties under development
U.S. real estate	81	$	213.7		16.6
Europe real estate	14	135.3			13.0
Total real estate properties under development	95	$	349.0		15.2
Initial weighted average cash yield (1)		7.4		%
Total (2)	249	$	3,076.3		10.9
Initial weighted average cash yield (1)		7.1		%

(1)The initial weighted average cash yield for a property is generally computed as estimated contractual first year cash net operating income, which, in the case of a net leased property, is equal to the aggregate cash base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a client could default on the payment of base rent (defined as the monthly aggregate cash amount charged to clients, inclusive of monthly base rent receivables), we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income used in the calculation of initial weighted average cash yield includes approximately $3.6 million received as settlement credits as reimbursement of free rent period for the nine months ended September 30, 2025.

In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return. When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash yield is computed as follows: estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs.

(2)Our clients occupying the new properties are 77.4% retail and 22.6% industrial based on net operating income. Approximately 30% of the net operating income generated from acquisitions during the nine months ended September 30, 2025 was from investment grade rated clients, their subsidiaries, or affiliated companies at the date of acquisition.

The aggregate purchase price, including properties acquired through takeout financing and reported in properties under development in the table above, was allocated as follows (in millions):


	Acquisitions - USD		Acquisitions - Sterling		Acquisitions - Euro
Land	$	119.5	£	302.3	€	103.9
Buildings and improvements	599.1		424.5		569.9
Lease intangible assets (1)	115.2		109.4		65.9
Other assets (2)	12.1		92.4		7.7
Lease intangible liabilities (3)	(24.3)		(8.0)		(14.8)
Other liabilities (4)	(5.4)		(3.2)		(2.0)
Total	$	816.2	£	917.4	€	730.6

(1)The weighted average amortization period for acquired lease intangible assets is 8.4 years.

(2)USD-denominated other assets consists of $7.3 million of financing receivables allocated to sales-leaseback transactions and $4.8 million of right-of-use assets accounted for as finance leases. Sterling-denominated other assets consists of £88.5 million of right-of-use assets accounted for as finance leases, £3.0 million of financing receivables allocated to sales-leaseback transactions, and £0.9 million of right-of-use assets under long-term ground leases. Euro-denominated other assets consists entirely of €7.7 million of right-of-use assets under long-term ground leases.

(3)The weighted average amortization period for acquired lease intangible liabilities is 13.8 years.

(4)USD-denominated other liabilities consists entirely of $5.4 million of lease liabilities under financing leases. Sterling-denominated other liabilities consists primarily of £2.2 million of lease liabilities under financing leases and £0.7 million of lease liabilities under ground leases. Euro-denominated other liabilities consists primarily of €1.8 million of deferred rent on certain below-market leases.

The properties acquired during the nine months ended September 30, 2025 generated total revenue and net income of $78.6 million and $21.1 million, respectively.

B. Investments in Existing Properties

During the nine months ended September 30, 2025, we capitalized costs of $88.9 million on existing properties in our portfolio, consisting of $84.0 million for building improvements, $4.6 million for re-leasing costs, and $0.3 million for recurring capital expenditures. In comparison, during the nine months ended September 30, 2024, we capitalized costs of $84.7 million on existing properties in our portfolio, consisting of $78.6 million for building improvements, $5.9 million for re-leasing costs, and $0.2 million for recurring capital expenditures.

C. Properties with Existing Leases

The value of the in-place and above-market leases is recorded to 'Lease intangible assets, net' on our consolidated balance sheets, and the value of the below-market leases is recorded to 'Lease intangible liabilities, net' on our consolidated balance sheets.

The values of the in-place leases are amortized as depreciation and amortization expense. The amounts amortized to expense for all of our in-place leases for the nine months ended September 30, 2025 and 2024 were $670.6 million and $652.8 million, respectively.

The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue in our consolidated statements of income and comprehensive income. The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the nine months ended September 30, 2025 and 2024 were $12.6 million and $26.1 million, respectively.

The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles as of September 30, 2025 (in thousands):


	Net increase (decrease) to rental revenue		Increase to amortization expense
2025	$	(10,004)	$	202,412
2026	(41,527)		735,289
2027	(40,374)		622,389
2028	(31,336)		526,342
2029	(27,459)		451,826
Thereafter	333,639		1,973,057
Total	$	182,939	$	4,511,315

D. Gain on Sales of Real Estate

The following table summarizes our properties sold during the periods indicated below (dollars in millions):


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Number of properties	140		92		268		214
Net sales proceeds	$	214.8	$	249.5	$	424.2	$	451.4
Gain on sales of real estate	$	49.1	$	50.6	$	110.2	$	92.3