Note 3 - Real Estate

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Real Estate Disclosure [Text Block]

3. Real Estate

Acquisitions

During the nine months ended September 30, 2023, the Company acquired the following operating properties, through direct asset purchases or consolidation due to change in control resulting from the purchase of additional interests in certain operating properties held in an unconsolidated joint venture (in thousands):

			Purchase Price
Property Name	Location	Month Acquired	Cash		Debt		Other		Total		GLA*
Portfolio (2 properties) (1)	Various	Jan-23	$	69,130	$	19,637	$	13,019	$	101,786		342
Crossroads Plaza Parcel	Cary, NC	Jan-23		2,173		-		-		2,173		5
Northridge Shopping Center Parcel	Arvada, CO	Jan-23		728		-		-		728		57
Stafford Marketplace Parcel (2)	Stafford, VA	Feb-23		-		-		12,527		12,527		87
Tustin Heights (1)	Tustin, CA	Mar-23		26,501		17,550		4,910		48,961		137
Marlton Plaza Parcel	Cherry Hill, NJ	Jul-23		529		-		-		529		-
Stonebridge at Potomac Town Center	Woodbridge, VA	Aug-23		169,840		-		1,667		171,507		504
			$	268,901	$	37,187	$	32,123	$	338,211		1,132

* Gross leasable area ("GLA")

(1)

Other includes the Company’s previously held equity investments in the Prudential Investment Program and net gains on change in control. The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as a result, recognized gains on change in control of interest of $7.7 million, in aggregate, resulting from the fair value adjustments associated with the Company’s previously held equity interests, which are included in Equity in income of joint ventures, net on the Condensed Consolidated Statements of Income. The Company previously held an ownership interest of 15.0% in these property interests. See Footnote 4 of the Notes to the Company’s Condensed Consolidated Financial Statements.

(2)

During March 2023, the Company received a parcel as consideration resulting from the exercise of a termination option of an operating lease.

During the nine months ended September 30, 2022, the Company acquired the following operating properties, through direct asset purchases (in thousands):

Property Name	Location	Month Acquired	Purchase Price		GLA
Ranchos San Marcos Parcel	San Marcos, CA	Jan-22	$	2,407		6
Columbia Crossing Parcel	Columbia, MD	Feb-22		16,239		60
Oak Forest Parcel	Houston, TX	Jun-22		3,846		4
Devon Village (1)	Devon, PA	Jun-22		733		-
Fishtown Crossing	Philadelphia, PA	Jul-22		39,291		133
Carman’s Plaza	Massapequa, NY	Jul-22		51,423		195
Pike Center (1)	Rockville, MD	Jul-22		21,850		-
			$	135,789		398

(1) Land parcel

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/consolidated during the nine months ended September 30, 2023 and 2022, is as follows (in thousands): 

	Allocation as of September 30, 2023			Weighted Average Amortization Period (in Years)		Allocation as of September 30, 2022			Weighted Average Amortization Period (in Years)
Land	$	103,836			n/a	$	64,480			n/a
Building		161,667			50.0		58,800			50.0
Building improvements		22,282			45.0		4,480			45.0
Tenant improvements		22,475			6.4		4,963			6.9
Solar panels		-			n/a		2,308			20.0
In-place leases		47,290			5.3		7,249			6.4
Above-market leases		4,981			6.7		199			3.8
Below-market leases		(25,129	)		21.6		(6,690	)		14.2
Other assets		1,777			n/a		-			n/a
Other liabilities		(968	)		n/a		-			n/a
Net assets acquired	$	338,211				$	135,789

Included in the Company’s Condensed Consolidated Statements of Income is $12.2 million and $3.2 million in total revenues from the date of acquisition through September 30, 2023 and 2022, respectively, for operating properties acquired/consolidated during each of the respective years.

Dispositions

The table below summarizes the Company’s disposition activity relating to consolidated operating properties and parcels for the nine months ended September 30, 2023 and 2022 (dollars in millions):

	Nine Months Ended September 30,
	2023		2022
Aggregate sales price/gross fair value (1) (2) (3)	$	175.0	$	172.2
Gain on sale of properties (4)	$	52.4	$	11.0
Number of properties sold		4		8
Number of parcels sold/deconsolidated (1)		11		10

(1) During 2023, the Company contributed a land parcel and related entitlements, located in Admore, PA, into a preferred equity investment with a gross value of $19.6 million. As a result, the Company no longer consolidates this land parcel and has a non-controlling interest in this investment. See Footnote 5 of the Notes to the Condensed Consolidated Financial Statements for preferred equity investment disclosure.

(2) During 2023, the Company provided as a lender seller financing of $25.0 million related to the sale of an operating property located in Gresham, OR. See Footnote 9 of the Notes to the Condensed Consolidated Financial Statements for mortgage receivable loan disclosure.

(3) Includes $19.7 million of Internal Revenue Code 26 U.S.C. §1031 proceeds held in escrow through sale of real estate interests for the nine months ended September 30, 2022.

(4) Before noncontrolling interests of $1.6 million and taxes of $1.5 million for the nine months ended September 30, 2023.

Impairments

During the nine months ended September 30, 2023, the Company recognized aggregate impairment charges of $14.0 million related to adjustments to property carrying values for properties which the Company is marketing for sale as part of its select capital recycling program and, as such, has adjusted the anticipated hold period for such properties. The Company’s estimated fair values of these properties were primarily based upon estimated sales prices from signed contracts or letters of intent from third party offers. See Footnote 13 to the Notes to the Condensed Consolidated Financial Statements for fair value disclosure.