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Lease Intangibles
 6 Months Ended
Jun. 30, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
Lease Intangibles

6. Lease Intangibles

Upon acquisitions of real estate (Note 2), the Company assesses the relative fair value of acquired assets (including land, buildings and improvements, and identified intangibles such as above- and below-market leases, including below-market options and acquired in-place leases) and assumed liabilities. The lease intangibles are amortized over the remaining terms of the respective leases, including option periods where applicable.

Intangible assets and liabilities are included in Other assets, net and Accounts payable and other liabilities (Note 5) on the Condensed Consolidated Balance Sheets and summarized as follows (in thousands):

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

Amortizable Intangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-place lease intangible assets

 

$

396,856

 

 

$

(273,567

)

 

 

123,289

 

 

$

336,660

 

 

$

(255,899

)

 

$

80,761

 

Above-market rent

 

 

29,850

 

 

 

(21,567

)

 

 

8,283

 

 

 

26,432

 

 

 

(20,340

)

 

 

6,092

 

 

 

$

426,706

 

 

$

(295,134

)

 

$

131,572

 

 

$

363,092

 

 

$

(276,239

)

 

$

86,853

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable Intangible Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Below-market rent

 

$

(223,168

)

 

$

124,391

 

 

$

(98,777

)

 

$

(196,239

)

 

$

118,933

 

 

$

(77,306

)

Above-market ground lease

 

 

(671

)

 

 

472

 

 

 

(199

)

 

 

(671

)

 

 

443

 

 

 

(228

)

 

 

$

(223,839

)

 

$

124,863

 

 

$

(98,976

)

 

$

(196,910

)

 

$

119,376

 

 

$

(77,534

)

 

During the six months ended June 30, 2025, the Company:

•
acquired in-place lease intangibles of $61.5 million, above-market rent of $3.4 million, and below-market rent of $27.6 million with weighted-average useful lives of 6.4, 4.7, and 12.0 years, respectively (Note 2);
•
recorded accelerated amortization related to in-place lease intangible assets of $1.3 million related to early tenant lease terminations, of which the Company’s share was $1.2 million.

Amortization of in-place lease intangible assets is recorded in depreciation and amortization expense in the Condensed Consolidated Statements of Operations. Amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental income, respectively, in the Condensed Consolidated Statements of Operations. Amortization of above-market ground leases is recorded as a reduction to rent expense on the Consolidated Statements of Operations.

The following table summarizes the scheduled amortization of acquired lease intangible assets and assumed liabilities as of June 30, 2025 (in thousands):

 

Years Ending December 31,

 

Net Increase in
Rental Revenues

 

 

Increase to
Amortization Expense

 

 

Reduction of
Property Operating Expense

 

2025 (Remainder)

 

$

3,926

 

 

$

(16,826

)

 

$

29

 

2026

 

 

7,624

 

 

 

(28,245

)

 

 

58

 

2027

 

 

7,181

 

 

 

(21,379

)

 

 

58

 

2028

 

 

7,416

 

 

 

(15,360

)

 

 

54

 

2029

 

 

7,334

 

 

 

(10,682

)

 

 

—

 

Thereafter

 

 

57,013

 

 

 

(30,797

)

 

 

—

 

Total

 

$

90,494

 

 

$

(123,289

)

 

$

199