Impairment Charges

12 Months Ended

Dec. 31, 2024

11.

Impairment Charges

The Company recorded impairment charges based on the difference between the carrying value of the three properties and their estimated fair market values totaling $138.2 million for the year ended December 31, 2024 and $7.0 million for the year ended December 31, 2022. In 2024, the impairment charges recorded were triggered by a change in the hold period assumptions and these properties were subsequently sold in 2024. In 2022, the impairment charge was recorded as a result of a tenant exercising a $7.0 million fixed-price purchase option on their building pursuant to the lease agreement. This asset was sold in the fourth quarter of 2022.

The following table presents information about the fair value of real estate that was impaired, and therefore, measured on a fair value basis, along with the related impairment charge. The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions).


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total		Total Impairment Charges
December 31, 2024
Long-lived assets held and used		—		—	$	138.2	$	138.2	$	66.6
December 31, 2022
Long-lived assets held and used		—		—		7.0		7.0		2.5

The following table presents quantitative information about the significant unobservable inputs used by the Company to determine the fair value (in millions, except per square foot):

         
        Quantitative Information About Level 3 Fair Value Measurements

         
        Valuation

        Description

        Fair Value

        Technique

        Unobservable Inputs

        Range

Impairment of consolidated assets

22.2

Indicative Bid

Indicative Bid(A)

N/A

116.0

Income Capitalization Approach

Market Capitalization Rate

7.0%—7.7%

Cost per square foot

44

(A) Fair value measurements based upon an indicative bid and developed by third-party sources (including offers and comparable sales values), subject to the Company’s corroboration for reasonableness. The Company does not have access to certain unobservable inputs used by these third parties to determine these estimated fair values.

For the impairment charge recorded in the year ended December 31, 2022, the valuation techniques and unobservable inputs used by the Company to determine fair value measurements were based upon an indicative bid and developed by third-party sources (including offers and comparable sales values), subject to the Company’s corroboration for reasonableness. The Company does not have access to certain unobservable inputs used by these third parties to determine these estimated fair values. Assets where the Company identified an impairment charge, were generally sold within one year of the period in which the impairment charge was recorded.