Quarterly report pursuant to Section 13 or 15(d)

Real Estate (Tables)

v3.10.0.1
Real Estate (Tables)
9 Months Ended
Sep. 30, 2018
Real Estate [Abstract]  
Schedule of investment properties
Investment properties consist of the following (in thousands):
 
September 30, 2018
 
December 31, 2017
 
(unaudited)
 
 
Land and land improvements
$
96,945

 
$
91,108

Land held for improvement

 
2,305

Buildings and improvements
366,217

 
312,831

Investment properties at cost
463,162

 
406,244

Less accumulated depreciation
(36,190
)
 
(31,045
)
    Investment properties, net
$
426,972

 
$
375,199

Schedule of dispositions
Dispositions
 
 
Property
 
Contract Price
 
Gain
 
Net Proceeds
 
 
 
 
(in thousands)
January 12, 2018
 
Chipotle Ground Lease at Conyers Crossing
 
$
1,270

 
$
1,042

 
$
1,160

July 19, 2018
 
Laskin Road Land Parcel (1.5 acres)
 
2,858

 
903

 
2,747

September 27, 2018
 
Shoppes at Eagle Harbor
 
5,705

 
1,270

 
2,071

 
 
 
 
$
9,833

 
$
3,215

 
$
5,978

he following is a summary of the income from discontinued operations for the three and nine months ended September 30, 2018 and 2017 (in thousands):
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
(unaudited)
Revenues
$

 
$

 
$

 
$
26

Expenses

 

 

 
1

Operating income

 

 

 
25

Interest expense

 

 

 
9

Income from discontinued operations before gain on disposal of properties

 

 

 
16

Gain on disposal of properties

 

 
903

 
1,502

Net Income from discontinued operations
$

 
$

 
$
903

 
$
1,518

Schedule of recognized identified assets acquired and liabilities assumed
The following summarizes the consideration paid and the purchase allocation of assets acquired and liabilities assumed in conjunction with the acquisition described above in accordance with ASU 2017-01, along with a description of the methods used to determine the purchase price allocation (in thousands, unaudited). In determining the purchase price allocation, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.
Purchase price allocation of assets acquired:
 
 
Investment property (a)
$
75,123

 
Lease intangibles and other assets (b)
10,718

 
Above market leases (d)
2,019

 
Restricted cash (c)
2,500

 
Below market leases (d)
(4,710
)
 
Net purchase price allocation of assets acquired:
$
85,650

 
 
 
 
 
Purchase consideration:
 
 
 
Consideration paid with cash
$
23,153

 
Consideration paid with restricted cash (c)
2,500

 
Consideration paid with assumption of debt (e)
58,867

 
Consideration paid with common stock
1,130

 
 
 
 
 
 
Total consideration (f)
$
85,650

a.
Represents the purchase price allocation of the net investment properties acquired which includes land, buildings, site improvements and tenant improvements. The purchase price allocation was determined using following approaches:
i.
the market approach valuation methodology for land by considering similar transactions in the markets;
ii.
a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, “go dark” analyses and residual calculations incorporating the land values; and
iii.
the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates.
b.
Represents the purchase price allocation of lease intangibles and other assets. Lease intangibles includes in place leases and ground lease sandwich interests associated with replacing existing leases. The income approach was used to determine the allocation of these intangible assets which included estimated market rates and expenses.
c.
Represents the purchase price allocation of deleveraging reserve (the “Deleveraging Reserve”) released upon the maturity or earlier payment in full of the loan or until the reduction of the principal balance of the loan to $50,000,000.
d.
Represents the purchase price allocation of above/below market leases. The income approach was used to determine the allocation of above/below market leases using market rental rates for similar properties.
e.
Assumption of $53.71 million of debt at a rate of 4.49%, maturing July 2023 with monthly principal and interest payments of $333,159 and assumption of $5.16 million of debt at a rate of 4.95%, maturing January 2026 with monthly principal and interest payments of $29,964.
f.
Represents the components of purchase consideration paid.