Note 4 - Real Estate

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Real Estate Disclosure [Text Block]

4. Real Estate

Acquisitions 

During the nine months ended September 30, 2021, the Company acquired the following operating properties, through direct asset purchases (in thousands):

			Purchase Price
Property Name	Location	Month Acquired	Cash		Other Consideration**		Total		GLA*
Distribution Center #1	Lancaster, CA	Jan-21	$	58,723	$	11,277	$	70,000		927
Distribution Center #2	Woodland, CA	Jan-21		27,589		6,411		34,000		508
			$	86,312	$	17,688	$	104,000		1,435

* Gross leasable area ("GLA")

** Consists of the fair value of the assets acquired which exceeded the purchase price upon closing. The transaction was a sale-leaseback with the seller which resulted in the recognition of a prepayment of rent of $17.7 million in accordance with ASC 842, Leases at closing. The prepayment of rent was amortized over the initial term of the lease through Revenues from rental properties, net on the Company's Condensed Consolidated Statements of Operations. See Footnote 12 of the Company’s Condensed Consolidated Financial Statements for additional discussion regarding fair value allocation of partnership interest for noncontrolling interests.

The two distribution centers were purchased through a TRS of the Company during January 2021, and they were subsequently sold in June 2021 and are included in the Dispositions disclosure below. Included in the Company's Condensed Consolidated Statements of Operations is $3.2 million in total revenues from the date of acquisition through the date of disposition for these two operating properties.

The purchase price for these acquisitions was allocated to real estate and related intangible assets and liabilities acquired, as applicable, in accordance with our accounting policies for asset acquisitions. The purchase price allocation for properties acquired during the nine months ended September 30, 2021, is as follows (in thousands): 

	Allocation as of September 30, 2021			Weighted Average Amortization Period (in Years)
Land	$	19,527			n/a
Building		87,691			50.0
Building improvements		6,251			45.0
Tenant improvements		711			20.0
In-place leases		11,120			20.0
Below-market leases		(21,300	)		60.0
Net assets acquired	$	104,000

Dispositions 

The table below summarizes the Company’s disposition activity relating to consolidated operating properties and parcels (dollars in millions):

	Nine Months Ended September 30,
	2021		2020
Aggregate sales price	$	156.6	$	22.6
Gain on sale of properties (1)	$	30.8	$	5.7
Number of properties sold		5		3
Number of parcels sold		9		1

(1) Before noncontrolling interests of $3.0 million and taxes of $2.2 million, after utilization of net operating loss carryforwards, for the nine months ended September 30, 2021.