Real Estate and Real Estate-Related Intangibles (Tables)
|
12 Months Ended |
Dec. 31, 2019 |
|---|
| Real Estate [Abstract] |
|
| Schedule of Real Estate Assets |
The Company's real estate assets consist of the following ($ in thousands): | | | | | | | | | | As of | | December 31, 2019 | | December 31, 2018 | Land and land improvements, at cost | $ | 494,670 |
| | $ | 477,527 |
| Buildings and improvements, at cost | 193,232 |
| | 192,396 |
| Less: accumulated depreciation | (16,286 | ) | | (10,257 | ) | Total real estate, net | $ | 671,616 |
| | $ | 659,666 |
| Real estate-related intangible assets, net | 242,837 |
| | 262,531 |
| Total real estate, net and real estate-related intangible assets, net | $ | 914,453 |
| | $ | 922,197 |
|
|
| Schedule of Real Estate-Related Intangible Assets, Net |
Real estate-related intangible assets, net consist of the following items ($ in thousands): | | | | | | | | | | | | | | As of December 31, 2019 | | Gross Intangible | | Accumulated Depreciation | | Carrying Value | Above-market lease assets, net(1) | $ | 203,288 |
| | $ | (6,183 | ) | | $ | 197,105 |
| In-place lease assets, net(2) | 53,626 |
| | (8,629 | ) | | 44,997 |
| Other intangible assets, net | 750 |
| | (15 | ) | | 735 |
| Total | $ | 257,664 |
| | $ | (14,827 | ) | | $ | 242,837 |
|
| | | | | | | | | | | | | | As of December 31, 2018 | | Gross Intangible | | Accumulated Depreciation | | Carrying Value | Above-market lease assets, net(1) | $ | 193,249 |
| | $ | (3,040 | ) | | $ | 190,209 |
| In-place lease assets, net(2) | 52,071 |
| | (5,288 | ) | | 46,783 |
| Below-market lease asset, net(3) | 26,484 |
| | (1,688 | ) | | 24,796 |
| Other intangible assets, net | 750 |
| | (7 | ) | | 743 |
| Total | $ | 272,554 |
| | $ | (10,023 | ) | | $ | 262,531 |
|
_______________________________________________________________________________ | | (1) | Above-market lease assets are recognized during business combinations and asset acquisitions when the present value of market rate rental cash flows over the term of a lease is less than the present value of the contractual in-place rental cash flows. Above-market lease assets are amortized over the non-cancelable term of the leases. |
| | (2) | In-place lease assets are recognized during business combinations and asset acquisitions and are estimated based on the value associated with the costs avoided in originating leases comparable to the acquired in-place leases as well as the value associated with lost rental revenue during the assumed lease-up period. In-place lease assets are amortized over the non-cancelable term of the leases. |
(3) Below-market lease asset, net resulted from the acquisition of the initial portfolio from iStar and relates to a property that is majority-owned by a third party and is ground leased to the Company. The Company is obligated to pay the owner of the property $0.4 million, subject to adjustment for changes in the CPI, per year through 2044; however, the Company's tenant at the property pays this expense directly under the terms of a master lease. The below-market lease asset is amortized over the term of the lease. Effective with the adoption of ASU 2016-02 on January 1, 2019, below-market lease asset, net was reclassified to "Deferred expenses and other assets, net" on the Company's consolidated balance sheet (refer to Note 3).
|
| Schedule or Amortization of Real Estate Properties |
The amortization of real estate-related intangible assets had the following impact on the Company's consolidated statements of operations for the years ended December 31, 2019 and 2018 ($ in thousands): | | | | | | | | | | | | | | Income Statement | | For the Years Ended December 31, | Intangible asset | | Location | | 2019 | | 2018 | Above-market lease assets (decrease to income) | | Operating lease income | | $ | 3,144 |
| | $ | 2,142 |
| In-place lease assets (decrease to income) | | Depreciation and amortization | | 3,342 |
| | 3,134 |
| Below-market lease asset (decrease to income) | | Real estate expense | | — |
| | 989 |
| Other intangible assets (decrease to income) | | Operating lease income | | 8 |
| | 7 |
|
|
| Schedule of Future Amortization Expense |
The estimated expense from the amortization of real estate-related intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands) (1): | | | | | | Year | | Amount | 2020 | | $ | 6,665 |
| 2021 | | 6,665 |
| 2022 | | 6,665 |
| 2023 | | 6,665 |
| 2024 | | 6,665 |
|
_______________________________________________________________________________ (1) As of December 31, 2019, the weighted average amortization period for the Company's real estate-related intangible assets was approximately 80.3 years.
|
| Real Estate - Related Intangibles, Liabilities |
Real estate-related intangible liabilities, net consist of the following items ($ in thousands): | | | | | | | | | | | | | | As of December 31, 2019 | | Gross Intangible | | Accumulated Depreciation | | Carrying Value | Below-market lease liabilities(1) | $ | 59,015 |
| | $ | (1,682 | ) | | $ | 57,333 |
|
| | | | | | | | | | | | | | As of December 31, 2018 | | Gross Intangible | | Accumulated Depreciation | | Carrying Value | Below-market lease liabilities(1) | $ | 58,660 |
| | $ | (1,040 | ) | | $ | 57,620 |
|
_______________________________________________________________________________ (1) Below-market lease liabilities are recognized during business combinations and asset acquisitions when the present value of market rate rental cash flows over the term of a lease exceeds the present value of the contractual in-place rental cash flows. Below-market lease liabilities are amortized over the term of the leases.
|
| Purchase Price Allocations |
The amortization of real estate-related intangible liabilities had the following impact on the Company's consolidated statements of operations for the years ended December 31, 2019 and 2018 ($ in thousands): | | | | | | | | | | | | | | Income Statement | | For the Years Ended December 31, | Intangible liability | | Location | | 2019 | | 2018 | Below-market lease liabilities (increase to income) | | Operating lease income | | $ | 642 |
| | $ | 621 |
|
|
| Future Minimum Ground Net Lease Payments |
Future minimum lease payments to be collected under non-cancelable operating leases, excluding lease payments that are not fixed and determinable, in effect as of December 31, 2019, are as follows by year ($ in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | Year | | Inflation- Linked | | Fixed Bumps with Inflation Adjustments | | Fixed Bumps | | Percentage Rent | | Fixed Bumps with Percentage Rent | | Total | 2020 | | $ | 5,357 |
| | $ | 17,708 |
| | $ | 2,117 |
| | $ | 10,519 |
| | $ | 356 |
| | $ | 36,057 |
| 2021 | | 5,357 |
| | 18,037 |
| | 2,155 |
| | 10,519 |
| | 356 |
| | 36,424 |
| 2022 | | 5,357 |
| | 18,384 |
| | 2,185 |
| | 10,519 |
| | 356 |
| | 36,801 |
| 2023 | | 5,357 |
| | 18,833 |
| | 2,213 |
| | 10,519 |
| | 281 |
| | 37,203 |
| 2024 | | 5,357 |
| | 19,193 |
| | 2,248 |
| | 10,519 |
| | 51 |
| | 37,368 |
| Thereafter | | 418,055 |
| | 4,765,352 |
| | 440,167 |
| | 18,896 |
| | 179 |
| | 5,642,649 |
|
|