Investments
 12 Months Ended
Dec. 31, 2018
Real Estate [Abstract]  
Investments
INVESTMENTS
Real Estate Investments
As of December 31, 2018, the Company’s gross investment in real estate properties and loans totaled approximately $5.12 billion, representing investments in 1,514 properties, including 52 properties or other related assets securing mortgage loans. The gross investment is comprised of land, buildings, lease intangible assets and lease intangible liabilities, as adjusted for any impairment, and the carrying amount of loans receivable, real estate assets held under direct financing leases and real estate assets held for sale. The portfolio is geographically dispersed throughout 49 states with only one state, Texas, with a real estate investment of 12.0%, accounting for more than 10.0% of the total dollar amount of the Company’s real estate investment portfolio.
During the years ended December 31, 2018 and 2017, the Company had the following real estate and loan activity, net of accumulated depreciation and amortization:
 
Number of Properties
 
Dollar Amount of Investments
 
Owned
 
Financed
 
Total
 
Owned
 
Financed
 
Total
 
 
 
 
 
 

 
(In Thousands)
Gross balance, December 31, 2016
2,541

 
74

 
2,615

 
$
8,181,076

 
$
66,578

 
$
8,247,654

Acquisitions/improvements (1)
43

 
16

 
59

 
326,766

 
23,300

 
350,066

Dispositions of real estate (2)(3)
(192
)
 
—

 
(192
)
 
(510,863
)
 
—

 
(510,863
)
Principal payments and payoffs
—

 
(2
)
 
(2
)
 
—

 
(7,878
)
 
(7,878
)
Impairments
—

 
—

 
—

 
(101,941
)
 
(389
)
 
(102,330
)
Write-off of gross lease intangibles
—

 
—

 
—

 
(67,139
)
 
—

 
(67,139
)
Loan premium amortization and other
—

 
—

 
—

 
(4,841
)
 
(1,644
)
 
(6,485
)
Gross balance, December 31, 2017
2,392

 
88

 
2,480

 
7,823,058

 
79,967

 
7,903,025

Acquisitions/improvements (1)
21

 
2

 
23

 
308,985

 
37,888

 
346,873

Dispositions of real estate (2)(3)
(52
)
 
(5
)
 
(57
)
 
(126,961
)
 
—

 
(126,961
)
Principal payments and payoffs
—

 
(31
)
 
(31
)
 
—

 
(30,863
)
 
(30,863
)
Impairments
—

 
—

 
—

 
(17,668
)
 
—

 
(17,668
)
Write-off of gross lease intangibles
—

 
—

 
—

 
(54,820
)
 
—

 
(54,820
)
Loan premium amortization and other
—

 
—

 
—

 
(955
)
 
(2,060
)
 
(3,015
)
Spin-off to SMTA
(899
)
 
(2
)
 
(901
)
 
(2,855,052
)
 
(37,888
)
 
(2,892,940
)
Gross balance, December 31, 2018
1,462

 
52

 
1,514

 
$
5,076,587

 
$
47,044

 
$
5,123,631

Accumulated depreciation and amortization
 
 
 
 
 
 
(727,533
)
 
—

 
(727,533
)
Net balance, December 31, 2018
 
 
 
 
 
 
$
4,349,054

 
$
47,044

 
$
4,396,098


(1) 
Includes investments of $46.0 million and $42.6 million, respectively, in revenue producing capitalized expenditures, as well as $6.3 million and $3.5 million, respectively, of non-revenue producing capitalized expenditures for the years ended December 31, 2018 and 2017.
(2) 
The total accumulated depreciation and amortization associated with dispositions of real estate was $19.5 million and $57.1 million, respectively, for the years ended December 31, 2018 and 2017.
(3) 
The total gain on disposal of assets for properties held in use was $1.4 million, $24.6 million and $35.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. The total gain on disposal of assets for properties held for sale was $13.0 million, $40.5 million and $16.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases (including realized rent increases occurring after January 1, 2019) are as follows (in thousands):
 
December 31,
2018
2019
$
379,353

2020
374,010

2021
354,562

2022
332,489

2023
308,001

Thereafter
2,180,140

Total future minimum rentals
$
3,928,555


Because lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum rentals do not include any contingent rentals based on a percentage of the lessees’ gross sales or lease escalations based on future changes in the CPI or other stipulated reference rate.
Loans Receivable
The following table details loans receivable, net of premiums, discounts and allowance for loan losses (in thousands):
 
December 31,
2018
 
December 31,
2017
Mortgage loans - principal
$
42,660

 
$
69,963

Mortgage loans - premium, net of amortization
2,527

 
5,038

Allowance for loan losses
—

 
(389
)
    Mortgage loans, net
45,187

 
74,612

Other note receivables - principal
2,082

 
5,355

Other note receivables - discount, net of amortization
(225
)
 
—

     Other note receivables
1,857

 
5,355

Total loans receivable, net
$
47,044

 
$
79,967


As of December 31, 2018 and 2017, the Company held a total of 3 and 10, respectively, first-priority mortgage loans (representing loans to three and six borrowers, respectively). The mortgage loans are secured by single-tenant commercial properties and generally have fixed interest rates over the term of the loans. There are two other notes receivable as of December 31, 2018, of which one $0.1 million note is secured by tenant assets and stock and the remaining note is unsecured. As of December 31, 2017, there were three other notes receivable, of which one $3.5 million note was secured by tenant assets and stock and the remaining two notes were unsecured.
Lease Intangibles, Net
The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):
 
December 31,
2018
 
December 31,
2017
In-place leases
$
381,143

 
$
591,551

Above-market leases
62,902

 
89,640

Less: accumulated amortization
(149,582
)
 
(271,288
)
Intangible lease assets, net
$
294,463

 
$
409,903

 
 
 
 
Below-market leases
$
167,527

 
$
216,642

Less: accumulated amortization
(47,365
)
 
(61,339
)
Intangible lease liabilities, net
$
120,162

 
$
155,303


The amounts amortized as a net increase to rental revenue for capitalized above and below-market leases were $5.5 million, $6.5 million and $6.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. The value of in-place leases amortized and included in depreciation and amortization expense was $32.6 million, $43.3 million and $46.4 million for the years ended December 31, 2018, 2017 and 2016, respectively. The remaining weighted average amortization period for in-place leases, above-market leases, below-market leases and in total was 14.0 years 10.1 years, 17.7 years and 10.6 years, respectively, as of December 31, 2018. The remaining weighted average amortization period for in-place leases, above-market leases, below-market leases and in total was 13.8 years, 9.5 years, 17.5 years and 10.6 years, respectively, as of December 31, 2017. During the year ended December 31, 2018, the Company acquired in-place lease intangible assets of $21.7 million, above-market lease intangible assets of $3.5 million and below-market lease intangible liabilities of $0.4 million.
Based on the balance of intangible assets and liabilities at December 31, 2018, the net aggregate amortization expense for the next five years and thereafter is expected to be as follows (in thousands):
2019
$
22,538

2020
21,650

2021
20,034

2022
17,658

2023
16,472

Thereafter
75,949

Total future minimum amortization
$
174,301


Real Estate Assets Under Direct Financing Leases
The components of real estate investments held under direct financing leases were as follows (in thousands):
 
December 31,
2018
 
December 31, 2017
Minimum lease payments receivable
$
5,390

 
$
7,325

Estimated residual value of leased assets
20,097

 
24,552

Unearned income
(5,198
)
 
(7,012
)
Real estate assets under direct financing leases, net
$
20,289

 
$
24,865

Real Estate Assets Held for Sale
The Company is continually evaluating the portfolio of real estate assets and may elect to dispose of assets considering criteria including, but not limited to, tenant concentration, tenant credit quality, unit financial performance, local market conditions and lease rates, associated indebtedness, asset location, and tenant operation type (e.g., industry, sector, or concept/brand). Real estate assets held for sale are expected to be sold within twelve months. The following table shows the activity in real estate assets held for sale, net for the years ended December 31, 2018 and 2017:
 
Number of Properties
 
Carrying Value
 
(In Thousands)
Balance, December 31, 2016
44

 
$
160,570

Transfers from real estate investments
82

 
216,502

Sales
(91
)
 
(208,029
)
Transfers to real estate investments held and used
(20
)
 
(95,382
)
Impairments
—

 
(24,732
)
Balance, December 31, 2017
15

 
48,929

Transfers from real estate investments
9

 
39,488

Sales
(9
)
 
(35,657
)
Transfers to real estate investments held and used
(7
)
 
(25,715
)
Transfers to SMTA
(5
)
 
(7,853
)
Impairments
—

 
(989
)
Balance, December 31, 2018
3

 
$
18,203


Impairments
The following table summarizes total impairments recognized in continuing and discontinued operations on the accompanying consolidated statements of operations (in thousands): 
 
Years Ended December 31,
 
2018
 
2017
 
2016
Real estate and intangible asset impairment
$
17,208

 
$
93,441

 
$
80,390

Write-off of lease intangibles, net
477

 
8,500

 
7,683

Loans receivable (recovery) impairment
(17
)
 
389

 
176

Total impairments from real estate investment net assets
17,668

 
102,330

 
88,249

Other impairment
—

 
—

 
26

Total impairments
$
17,668

 
$
102,330

 
$
88,275


Impairments for the twelve months ended December 31, 2018 were comprised of $1.0 million on properties classified as held for sale and $16.7 million on properties classified as held and used. Impairments for the year ended December 31, 2017 were comprised of $24.8 million on properties held for sale and $77.2 million on properties classified as held and used. Impairments for the year ended December 31, 2016 were comprised of $20.2 million on properties held for sale and $68.1 million on properties classified as held and used.