Investments
 9 Months Ended
Sep. 30, 2016
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]  
Investments
Investments
Real Estate Investments

As of September 30, 2016, the Company's gross investment in real estate properties and loans totaled approximately $8.39 billion, representing investments in 2,705 properties, including 75 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 12.3%, accounting for more than 10.0% of the total dollar amount of the Company’s real estate investment portfolio.

The properties that the Company owns are leased to tenants under long-term operating leases that typically include one or more renewal options. The leases are generally triple-net, which provides that the lessee is responsible for the payment of all property operating expenses, including property taxes, maintenance and repairs, and insurance costs. Therefore, the Company is generally not responsible for repairs or other capital expenditures related to its properties, unless the property is not subject to a triple-net lease agreement or becomes vacant. Generally, the Company's single-tenant leases contain contractual provisions increasing the rental revenue over the term of the lease at specified dates by: (1) a fixed amount or (2) increases in CPI over a specified period (typically subject to ceilings) or (b) a fixed percentage.

During the nine months ended September 30, 2016, the Company had the following real estate and loan activity, net of accumulated depreciation and amortization:
 
Number of Properties
 
Dollar Amount of Investments
 
Owned (4)
 
Financed
 
Total
 
Owned
 
Financed
 
Total
 
 
 
 
 
 
 
(In Thousands)
Gross balance, December 31, 2015
2,485

 
144

 
2,629

 
$
8,198,685

 
$
104,003

 
$
8,302,688

Acquisitions/improvements (1) (3) (5)
227

 
—

 
227

 
459,384

 
—

 
459,384

Dispositions of real estate (2) (3)
(82
)
 
—

 
(82
)
 
(281,474
)
 
—

 
(281,474
)
Principal payments and payoffs (5)
—

 
(69
)
 
(69
)
 
—

 
(32,875
)
 
(32,875
)
(Impairments)/recoveries
—

 
—

 
—

 
(41,699
)
 
324

 
(41,375
)
Write-off of gross assets
—

 
—

 
—

 
(15,556
)
 
—

 
(15,556
)
Loan premium amortization and other
—

 
—

 
—

 
(64
)
 
(2,234
)
 
(2,298
)
Gross balance, September 30, 2016
2,630

 
75

 
2,705

 
8,319,276

 
69,218

 
8,388,494

Accumulated depreciation and amortization
 
 
 
 
 
 
(1,197,104
)
 
—

 
(1,197,104
)
Other non-real estate assets held for sale
 
 
 
 
 
 
2,072

 
—

 
2,072

Net balance, September 30, 2016
 
 
 
 
 
 
$
7,124,244

 
$
69,218

 
$
7,193,462


(1) Includes investments of $5.4 million in revenue producing capitalized expenditures, as well as $2.9 million of non-revenue producing capitalized maintenance expenditures. Capitalized maintenance expenditures are not included in the Company's investment in real estate disclosed elsewhere.
(2) The total accumulated depreciation and amortization associated with dispositions of real estate was $48.6 million.
(3) During the nine months ended September 30, 2016, pursuant to 1031 Exchanges, the Company sold 6 properties for $43.7 million. This amount, along with $39.9 million of 2015 proceeds, was used to partially fund 33 property acquisitions.
(4) At September 30, 2016 and December 31, 2015, 43 and 36, of the Company's properties, respectively, were vacant and in the Company’s possession; of these vacant properties, 11 and 12, respectively, were held for sale.
(5) During the nine months ended September 30, 2016, the Company transferred cash and mortgage notes receivable secured by 69 properties to acquire the fee simple interest of those properties.
Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases at September 30, 2016 (in thousands):
Remainder of 2016
$
151,256

2017
607,742

2018
594,423

2019
577,854

2020
557,730

Thereafter
4,535,935

Total future minimum rentals
$
7,024,940


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.
Certain of the Company’s leases contain purchase options. Most of these options are at or above fair market value at the time the option is exercisable, and none of these purchase options represent bargain purchase options.
Loans Receivable
The following table details loans receivable, net of premium and allowance for loan losses (in thousands):
 
September 30,
2016
 
December 31,
2015
Mortgage loans - principal
$
57,422

 
$
90,096

Mortgage loans - premium
7,752

 
9,986

Mortgages loans, net
65,174

 
100,082

Other note receivables - principal
4,044

 
4,245

Allowance for loan losses
—

 
(324
)
Other note receivables, net
4,044

 
3,921

Total loans receivable, net
$
69,218

 
$
104,003


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, of which one $3.8 million note is secured by tenant assets and stock and the other is unsecured.
Allowance for Loan Losses

At September 30, 2016, there was no allowance for loan losses compared to an allowance for loan losses on an unsecured note receivable of $0.3 million at December 31, 2015. At September 30, 2016, there were no mortgages or notes receivable on non-accrual status compared to no mortgage loans and one note receivable with a balance of $0.3 million on non-accrual status at December 31, 2015.
Lease Intangibles, Net
The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):
 
September 30,
2016
 
December 31,
2015
In-place leases
$
640,108

 
$
649,182

Above-market leases
90,645

 
98,056

Less: accumulated amortization
(246,153
)
 
(220,520
)
Intangible lease assets, net
$
484,600

 
$
526,718

 
 
 
 
Below-market leases
$
237,667

 
$
238,039

Less: accumulated amortization
(50,732
)
 
(44,136
)
Intangible lease liabilities, net
$
186,935

 
$
193,903


The amounts amortized as a net increase to rental revenue for capitalized above- and below-market leases were $4.7 million and $4.3 million for the nine months ended September 30, 2016 and 2015, respectively, and $1.8 million and $1.5 million for the three months ended September 30, 2016 and 2015, respectively. The value of in-place leases amortized and included in depreciation and amortization expense was $35.1 million and $37.8 million for the nine months ended September 30, 2016 and 2015, respectively, and $11.6 million and $12.4 million for the three months ended September 30, 2016 and 2015, respectively.
Real Estate Assets Under Direct Financing Leases
The components of real estate investments held under direct financing leases were as follows (in thousands):
 
September 30,
2016
 
December 31,
2015
Minimum lease payments receivable
$
10,124

 
$
12,702

Estimated residual value of leased assets
35,640

 
43,789

Unearned income
(9,751
)
 
(12,167
)
Real estate assets under direct financing leases, net
$
36,013

 
$
44,324


Real Estate Assets Held for Sale
The following table shows the activity in real estate assets held for sale for the nine months ended September 30, 2016 (dollars in thousands):
 
Number of Properties
 
Carrying
Value
Balance, December 31, 2015
36

 
$
84,259

Transfers from real estate investments
47

 
146,107

Sales
(44
)
 
(106,317
)
Transfers to real estate investments
(3
)
 
(5,624
)
Balance, September 30, 2016
36

 
$
118,425


Impairments

The following table summarizes total impairment losses recognized in continuing and discontinued operations on the accompanying consolidated statements of operations (in thousands):
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2016
 
2015
 
2016
 
2015
Real estate and intangible asset impairment
$
13,894

 
$
19,919

 
$
35,236

 
$
55,273

Write-off of lease intangibles, net
1,491

 
713

 
6,463

 
1,268

Loans receivable impairment (recovery)
—

 
338

 
(324
)
 
338

Total impairments from real estate investment net assets
15,385

 
20,970

 
41,375

 
56,879

Other impairment
22

 
57

 
21

 
153

Total impairment loss in continuing and discontinued operations
$
15,407

 
$
21,027

 
$
41,396

 
$
57,032