Real Estate

12 Months Ended

Dec. 31, 2020

REAL ESTATE

Construction in Progress

Construction in progress includes land, preconstruction and development costs of active projects. Preconstruction costs include legal, zoning and permitting costs and other project carrying costs incurred prior to the commencement of construction. Development costs include direct construction costs and indirect costs incurred subsequent to the start of construction such as architectural, engineering, construction management and carrying costs consisting of interest, real estate taxes and insurance. The following table shows the components of construction in progress.


	December 31,
(in thousands)	2020		2019

Hampden House (formerly 7316 Wisconsin Avenue)	$	50,723	$	44,638
The Waycroft	8,651		255,443
Ashbrook Marketplace	153		19,128
Other	9,950		16,435
Total	$	69,477	$	335,644

Acquisitions

Ashbrook Marketplace

In May 2018, the Company acquired from the Saul Trust, in exchange for 176,680 limited partnership units, approximately 13.7 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Loudoun County, Virginia. Based on the closing price of the Company's common stock, the land and the limited partnership units were recorded at a value of $8.8 million. Acquisition costs related to the transaction totaled approximately $0.2 million.

Hampden House (formerly 7316 Wisconsin Avenue)

In September 2018, the Company purchased for $35.5 million, plus $0.7 million of acquisition costs, an office building and the underlying ground located at 7316 Wisconsin Avenue in Bethesda, Maryland. In December 2018, the Company purchased for $4.5 million, including acquisition costs, an interest in an adjacent parcel of land and retail building. The purchase price was funded through the Company's credit facility. Effective September 1, 2019, the asset was removed from service and transferred to construction in progress at its carrying value of $42.6 million.

Allocation of Purchase Price of Real Estate Acquired

The Company allocates the purchase price of real estate investment properties to various components, such as land, buildings and intangibles related to in-place leases and customer relationships, based on their relative fair values.

During 2018, the Company acquired properties that had an aggregate cost of $49.5 million, including acquisition costs. The purchase price was allocated to assets acquired and liabilities assumed based on their relative fair values as shown in the following table.


(in thousands)	Ashbrook Marketplace		Hampden House (formerly 7316 Wisconsin Avenue)		Total
Land	$	8,776	$	38,662	$	47,438
Buildings	—		979		979
In-place Leases	—		886		886
Above Market Rent	—		168		168
Below Market Rent	—		(21)		(21)
Total Purchase Price	$	8,776	$	40,674	$	49,450

The gross carrying amount of lease intangible assets included in deferred leasing costs as of December 31, 2020 and 2019 was $11.0 million and $11.7 million, respectively, and accumulated amortization was $8.6 million and $8.5 million, respectively. Amortization expense totaled $0.6 million, $0.9 million and $1.3 million, for the years ended December 31, 2020, 2019, and 2018, respectively. The gross carrying amount of below market lease intangible liabilities included in deferred income as of December 31, 2020 and 2019 was $23.7 million and $24.1 million, respectively, and accumulated amortization was $15.0 million and $13.9 million, respectively. Accretion income totaled $1.4 million, $1.5 million, and $1.7 million, for the years ended December 31, 2020, 2019, and 2018, respectively. The gross carrying amount of above market lease intangible assets included in accounts receivable as of December 31, 2020 and 2019 was $0.6 million and $0.6 million, respectively, and accumulated amortization was $128,900 and $108,300, respectively. Amortization expense totaled $43,600, $109,600 and $110,500, for the years ended December 31, 2020, 2019 and 2018, respectively. The remaining weighted-average amortization period as of December 31, 2020 is 4.3 years, 7.0 years, and 5.0 years for lease acquisition costs, above market leases and below market leases, respectively.

As of December 31, 2020, scheduled amortization of intangible assets and deferred income related to in place leases is as follows:


(In thousands)	Lease acquisition costs		Above market leases		Below market leases
2021	$	495	$	33	$	1,409
2022	368		33		1,306
2023	317		33		1,297
2024	198		33		878
2025	153		33		601
Thereafter	843		309		3,253
Total	$	2,374	$	474	$	8,744