Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 04, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-52596 | |
Entity Registrant Name | ARES REAL ESTATE INCOME TRUST INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 30-0309068 | |
Entity Address, Address Line One | One Tabor Center, 1200 Seventeenth Street, Suite 2900 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 303 | |
Local Phone Number | 228-2200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001327978 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class T | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,412,159 | |
Class S | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 48,907,555 | |
Class D | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,913,723 | |
Class I | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 68,759,036 | |
Class E | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 53,299,201 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Net investment in real estate properties | $ 3,619,719 | $ 2,589,826 |
Investment in unconsolidated joint venture partnerships | 106,343 | 57,425 |
Debt-related investments, net | 151,612 | 105,752 |
Cash and cash equivalents | 24,245 | 10,605 |
Restricted cash | 3,788 | 3,747 |
DST Program Loans | 88,597 | 62,123 |
Other assets | 79,373 | 56,397 |
Assets held for sale | 0 | 105,096 |
Total assets | 4,073,677 | 2,990,971 |
Liabilities | ||
Accounts payable and accrued expenses | 67,552 | 38,182 |
Debt, net | 1,566,225 | 1,363,234 |
Intangible lease liabilities, net | 43,652 | 47,499 |
Financing obligations, net | 1,153,175 | 661,075 |
Other liabilities | 106,678 | 89,817 |
Liabilities related to assets held for sale | 0 | 5,744 |
Total liabilities | 2,937,282 | 2,205,551 |
Commitments and contingencies (Note 13) | ||
Redeemable noncontrolling interest | 18,170 | 8,994 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value-200,000 shares authorized, none issued and outstanding | ||
Additional paid-in capital | 1,717,360 | 1,457,296 |
Distributions in excess of earnings | (925,083) | (865,844) |
Accumulated other comprehensive loss | 12,778 | (13,418) |
Total stockholders' equity | 807,081 | 579,730 |
Noncontrolling interests | 311,144 | 196,696 |
Total equity | 1,118,225 | 776,426 |
Total liabilities and equity | 4,073,677 | 2,990,971 |
Class T | ||
Stockholders' equity: | ||
Common stock | 247 | 164 |
Class S | ||
Stockholders' equity: | ||
Common stock | 481 | 358 |
Class D | ||
Stockholders' equity: | ||
Common stock | 79 | 67 |
Class I | ||
Stockholders' equity: | ||
Common stock | 682 | 544 |
Class E | ||
Stockholders' equity: | ||
Common stock | $ 537 | $ 563 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 200,000 | 200,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class T | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 24,712 | 16,425 |
Common stock, shares outstanding (in shares) | 24,712 | 16,425 |
Class S | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 48,146 | 35,757 |
Common stock, shares outstanding (in shares) | 48,146 | 35,757 |
Class D | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 7,933 | 6,749 |
Common stock, shares outstanding (in shares) | 7,933 | 6,749 |
Class I | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 68,169 | 54,406 |
Common stock, shares outstanding (in shares) | 68,169 | 54,406 |
Class E | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 53,657 | 56,328 |
Common stock, shares outstanding (in shares) | 53,657 | 56,328 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Rental revenues | $ 76,988 | $ 53,596 | $ 212,987 | $ 152,657 |
Debt-related income | 1,548 | 2,298 | 5,862 | 6,741 |
Total revenues | 78,536 | 55,894 | 218,849 | 159,398 |
Operating expenses: | ||||
Rental expenses | 28,095 | 17,842 | 74,305 | 52,318 |
Real estate-related depreciation and amortization | 36,713 | 18,821 | 101,067 | 52,728 |
General and administrative expenses | 3,155 | 2,183 | 7,786 | 6,582 |
Advisory fees | 8,980 | 5,480 | 24,351 | 15,389 |
Performance participation allocation | 3,710 | 3,774 | 22,088 | 7,769 |
Acquisition costs and reimbursements | 1,176 | 738 | 3,898 | 1,451 |
Impairment of real estate property | 0 | 0 | 0 | 758 |
Total operating expenses | 81,829 | 48,838 | 233,495 | 136,995 |
Other expenses (income): | ||||
Equity in income from unconsolidated joint venture partnerships | (1,590) | 0 | (2,298) | 0 |
Interest expense | 42,255 | 17,866 | 100,439 | 51,477 |
Gain on sale of real estate property | (11,303) | (25,979) | (94,827) | (53,321) |
Loss on extinguishment of debt and financing commitments, net | 0 | 0 | 8 | 0 |
Other income | (2,534) | (524) | (6,074) | (1,274) |
Total other expenses (income) | 26,828 | (8,637) | (2,752) | (3,118) |
Net (loss) income | (30,121) | 15,693 | (11,894) | 25,521 |
Net loss (income) attributable to redeemable noncontrolling interests | 253 | (99) | 67 | (169) |
Net loss (income) attributable to noncontrolling interests | 4,996 | (1,654) | 2,378 | (2,430) |
Net (loss) income attributable to common stockholders | $ (24,872) | $ 13,940 | $ (9,449) | $ 22,922 |
Weighted average number of common shares outstanding | ||||
Weighted-average shares outstanding-basic (in shares) | 200,667 | 157,025 | 190,199 | 151,045 |
Weighted-average shares outstanding-diluted (in shares) | 242,994 | 176,777 | 226,294 | 168,475 |
Net (loss) income attributable to common stockholders per common share - basic | $ (0.12) | $ 0.09 | $ (0.05) | $ 0.15 |
Net (loss) income attributable to common stockholders per common share - diluted | $ (0.12) | $ 0.09 | $ (0.05) | $ 0.15 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (30,121) | $ 15,693 | $ (11,894) | $ 25,521 |
Change from cash flow hedging activities | 17,445 | 2,313 | 31,258 | 10,259 |
Comprehensive (loss) income | (12,676) | 18,006 | 19,364 | 35,780 |
Comprehensive loss (income) attributable to redeemable noncontrolling interests | 106 | (114) | (216) | (239) |
Comprehensive loss (income) attributable to noncontrolling interests | 2,179 | (1,940) | (2,401) | (3,477) |
Comprehensive (loss) income attributable to common stockholders | $ (10,391) | $ 15,952 | $ 16,747 | $ 32,064 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Distributions in Excess of Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Beginning Balances (in shares) at Dec. 31, 2020 | 143,041 | |||||
Beginning Balances at Dec. 31, 2020 | $ 1,430 | $ 1,269,146 | $ (841,496) | $ (27,431) | $ 96,242 | $ 497,891 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) (excluding portion attributable to redeemable noncontrolling interest) | 22,922 | 2,430 | 25,352 | |||
Change from cash flow hedging activities (excluding portion attributable to redeemable noncontrolling interest) | 9,142 | 1,047 | 10,189 | |||
Issuance of common stock (in shares) | 23,916 | |||||
Issuance of common stock | $ 239 | 183,517 | 183,756 | |||
Share-based compensation (in shares) | 29 | |||||
Share-based compensation | 145 | 145 | ||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (4,100) | (4,100) | ||||
Trailing distribution fees | (8,222) | 2,000 | (4,656) | $ (10,878) | ||
Redemptions of common stock (in shares) | (6,601) | (6,601) | ||||
Redemptions of common stock | $ (65) | (50,065) | $ (50,130) | |||
Issuances of OP Units for DST Interests | 57,729 | 57,729 | ||||
Distributions declared on common stock and noncontrolling interests (excludes attributable to redeemable noncontrolling interest) | (42,476) | (4,575) | (47,051) | |||
Redemption value allocation adjustment to redeemable noncontrolling interest | (293) | (293) | ||||
Redemptions of noncontrolling interests | (305) | (3,987) | (4,292) | |||
Ending Balances (in shares) at Sep. 30, 2021 | 160,385 | |||||
Ending Balances at Sep. 30, 2021 | $ 1,604 | 1,389,823 | (859,050) | (18,289) | 144,230 | 658,318 |
Beginning Balances (in shares) at Jun. 30, 2021 | 152,021 | |||||
Beginning Balances at Jun. 30, 2021 | $ 1,520 | 1,330,413 | (859,021) | (20,301) | 116,306 | 568,917 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) (excluding portion attributable to redeemable noncontrolling interest) | 13,940 | 1,654 | 15,594 | |||
Change from cash flow hedging activities (excluding portion attributable to redeemable noncontrolling interest) | 2,012 | 286 | 2,298 | |||
Issuance of common stock (in shares) | 10,268 | |||||
Issuance of common stock | $ 103 | 79,369 | 79,472 | |||
Share-based compensation (in shares) | 21 | |||||
Share-based compensation | 60 | 60 | ||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (1,800) | (1,800) | ||||
Trailing distribution fees | (3,214) | 759 | (2,252) | (4,707) | ||
Redemptions of common stock (in shares) | (1,925) | |||||
Redemptions of common stock | $ (19) | (14,731) | (14,750) | |||
Issuances of OP Units for DST Interests | 31,788 | 31,788 | ||||
Distributions declared on common stock and noncontrolling interests (excludes attributable to redeemable noncontrolling interest) | (14,728) | (1,748) | (16,476) | |||
Redemption value allocation adjustment to redeemable noncontrolling interest | (108) | (108) | ||||
Redemptions of noncontrolling interests | (166) | (1,804) | (1,970) | |||
Ending Balances (in shares) at Sep. 30, 2021 | 160,385 | |||||
Ending Balances at Sep. 30, 2021 | $ 1,604 | 1,389,823 | (859,050) | (18,289) | 144,230 | 658,318 |
Beginning Balances (in shares) at Dec. 31, 2021 | 169,665 | |||||
Beginning Balances at Dec. 31, 2021 | $ 1,696 | 1,457,296 | (865,844) | (13,418) | 196,696 | 776,426 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) (excluding portion attributable to redeemable noncontrolling interest) | (9,449) | (2,378) | (11,827) | |||
Change from cash flow hedging activities (excluding portion attributable to redeemable noncontrolling interest) | 26,196 | 4,779 | $ 30,975 | |||
Issuance of common stock (in shares) | 38,620 | 38,600 | ||||
Issuance of common stock | $ 387 | 332,032 | $ 332,419 | |||
Share-based compensation (in shares) | 27 | |||||
Share-based compensation | 192 | 192 | ||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (7,172) | (7,172) | ||||
Trailing distribution fees | (13,312) | 3,688 | (11,744) | $ (21,368) | ||
Redemptions of common stock (in shares) | (5,695) | (5,695) | ||||
Redemptions of common stock | $ (57) | (48,726) | $ (48,783) | |||
Issuances of OP Units for DST Interests | 136,905 | 136,905 | ||||
Other noncontrolling interests net distributions | (54) | (54) | ||||
Distributions declared on common stock and noncontrolling interests (excludes attributable to redeemable noncontrolling interest) | (53,478) | (9,604) | (63,082) | |||
Redemption value allocation adjustment to redeemable noncontrolling interest | (1,900) | (1,900) | ||||
Redemptions of noncontrolling interests | (1,050) | (3,456) | (4,506) | |||
Ending Balances (in shares) at Sep. 30, 2022 | 202,617 | |||||
Ending Balances at Sep. 30, 2022 | $ 2,026 | 1,717,360 | (925,083) | 12,778 | 311,144 | 1,118,225 |
Beginning Balances (in shares) at Jun. 30, 2022 | 195,101 | |||||
Beginning Balances at Jun. 30, 2022 | $ 1,951 | 1,655,295 | (882,795) | (1,703) | 228,185 | 1,000,933 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) (excluding portion attributable to redeemable noncontrolling interest) | (24,872) | (4,996) | (29,868) | |||
Change from cash flow hedging activities (excluding portion attributable to redeemable noncontrolling interest) | 14,481 | 2,817 | 17,298 | |||
Issuance of common stock (in shares) | 9,776 | |||||
Issuance of common stock | $ 98 | 87,795 | 87,893 | |||
Share-based compensation (in shares) | 27 | |||||
Share-based compensation | 92 | 92 | ||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (1,771) | (1,771) | ||||
Trailing distribution fees | (2,940) | 1,399 | (7,921) | (9,462) | ||
Redemptions of common stock (in shares) | (2,287) | |||||
Redemptions of common stock | $ (23) | (20,260) | (20,283) | |||
Issuances of OP Units for DST Interests | 97,464 | 97,464 | ||||
Other noncontrolling interests net distributions | (31) | (31) | ||||
Distributions declared on common stock and noncontrolling interests (excludes attributable to redeemable noncontrolling interest) | (18,815) | (3,780) | (22,595) | |||
Redemption value allocation adjustment to redeemable noncontrolling interest | (304) | (304) | ||||
Redemptions of noncontrolling interests | (547) | (594) | (1,141) | |||
Ending Balances (in shares) at Sep. 30, 2022 | 202,617 | |||||
Ending Balances at Sep. 30, 2022 | $ 2,026 | $ 1,717,360 | $ (925,083) | $ 12,778 | $ 311,144 | $ 1,118,225 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Net (loss) income attributable to redeemable noncontrolling interests | $ (253) | $ 99 | $ (67) | $ 169 |
Unrealized gain (loss) from derivative instruments allocated to redeemable noncontrolling interest | 147 | 15 | 283 | 70 |
Distribution fees attributable to redeemable noncontrolling interest | $ 192 | $ 106 | $ 543 | $ 314 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities: | ||
Net income | $ (11,894) | $ 25,521 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Real estate-related depreciation and amortization | 101,067 | 52,728 |
Straight-line rent and amortization of above- and below-market leases | (5,941) | (6,759) |
Gain on sale of real estate property | (94,827) | (53,321) |
Performance participation allocation | 22,088 | 7,769 |
Equity in income of unconsolidated joint venture partnership | (2,298) | 0 |
Impairment of real estate property | 0 | 758 |
Amortization of debt and financing obligation costs | 5,464 | 4,766 |
Financing obligation liability appreciation | 24,721 | 4,181 |
Other | 2,177 | (5,725) |
Changes in operating assets and liabilities | 19,150 | 8,832 |
Net cash provided by operating activities | 59,707 | 38,750 |
Investing activities: | ||
Real estate acquisitions | (1,181,616) | (346,765) |
Capital expenditures | (25,309) | (22,725) |
Proceeds from disposition of real estate property | 274,816 | 141,360 |
Principal collections on debt-related investments | 4,084 | 2,405 |
Investment in unconsolidated joint venture partnerships | (47,906) | 0 |
Investment in debt-related investments | (49,699) | (402) |
Other | (13) | (48) |
Net cash used in investing activities | (1,025,643) | (226,175) |
Financing activities: | ||
Repayments of mortgage notes | (1,408) | (26,241) |
Net proceeds from (repayments of) line of credit | (71,000) | (21,000) |
Proceeds from term loan | 275,000 | 0 |
Redemptions of common stock | (48,783) | (50,130) |
Distributions paid to common stockholders, redeemable noncontrolling interest holders and noncontrolling interest holders | (36,104) | (27,552) |
Proceeds from issuance of common stock | 311,106 | 166,750 |
Proceeds from financing obligations, net | 576,541 | 163,018 |
Offering costs for issuance of common stock and private placements | (11,963) | (8,689) |
Redemption of noncontrolling interests | (4,506) | (4,292) |
Redemption of redeemable noncontrolling interests | (7,724) | 0 |
Deferred financing costs paid | (1,542) | (3,177) |
Net cash provided by financing activities | 979,617 | 188,687 |
Net increase in cash, cash equivalents and restricted cash | 13,681 | 1,262 |
Cash, cash equivalents and restricted cash, at beginning of period | 14,352 | 21,734 |
Cash, cash equivalents and restricted cash, at end of period | $ 28,033 | $ 22,996 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Unless the context otherwise requires, the “Company,” “we,” “our” or “us” refers to Ares Real Estate Income Trust Inc. and its consolidated subsidiaries. The Company is externally managed by its advisor. On July 1, 2021, Ares Management Corporation (“Ares”) closed on the acquisition of the U.S. real estate investment advisory and distribution business of Black Creek Group, including the Company’s former advisor, Black Creek Diversified Property Advisors LLC (the “Former Advisor”). As a result of the closing of this transaction, Ares Commercial Real Estate Management LLC became the Company’s new advisor (the “New Advisor”). Ares did not acquire the Company’s former sponsor, Black Creek Diversified Property Advisors Group LLC (the “Former Sponsor”), and the Company now considers the Ares real estate group (“AREG”) to be its Sponsor. References to the “Advisor” throughout this report mean Black Creek Diversified Property Advisors LLC for periods prior to July 1, 2021 and Ares Commercial Real Estate Management LLC for periods thereafter. The accompanying unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain disclosures normally included in the annual audited financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been omitted. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 14, 2022 (“2021 Form 10-K”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, higher interest rates and challenges in the supply chain, coupled with the war in Ukraine and the ongoing effects of the novel coronavirus pandemic, have the potential to negatively impact us. These current macroeconomic conditions may continue or aggravate and could cause the United States to experience an economic slowdown or recession. We anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with GAAP. As used herein, the term “commercial” refers to our office, retail and industrial properties or customers, as applicable. Reclassifications Certain items in our condensed consolidated statements of operations, condensed consolidated statements of equity and condensed consolidated statements of cash flows for the three and nine months ended September 30, 2021 have been reclassified to conform to the 2022 presentation. |
INVESTMENTS IN REAL ESTATE PROP
INVESTMENTS IN REAL ESTATE PROPERTIES | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
INVESTMENTS IN REAL ESTATE PROPERTIES | 2. INVESTMENTS IN REAL ESTATE PROPERTIES The following table summarizes our consolidated investments in real estate properties and excludes properties classified as held for sale. Refer to “Note 3” for detail relating to our real estate properties held for sale. As of (in thousands) September 30, 2022 December 31, 2021 Land $ 693,409 $ 583,728 Buildings and improvements 3,136,259 2,180,358 Intangible lease assets 315,429 284,128 Right of use asset 13,637 13,637 Investment in real estate properties 4,158,734 3,061,851 Accumulated depreciation and amortization (539,015) (472,025) Net investment in real estate properties $ 3,619,719 $ 2,589,826 Acquisitions During the nine months ended September 30, 2022, we acquired 100% of the following properties, all of which were determined to be asset acquisitions: ($ in thousands) Property Type Acquisition Date Total Purchase Price (1) 2022 Acquisitions: Skye 750 Residential 1/5/2022 $ 92,845 Arabelle City Center Residential 4/12/2022 156,781 Dallas Cityline Residential 4/13/2022 111,093 Dallas Wycliff Residential 4/13/2022 94,083 Dallas Maple District Residential 4/13/2022 93,089 San Vance Residential 4/13/2022 77,586 San Stone Oak Residential 4/13/2022 72,605 General Washington IC Industrial 1/7/2022 11,051 Western Foods Center Industrial 1/14/2022 39,298 Orlando I & II LC Industrial 2/17/2022 94,759 Orlando III & IV LC Industrial 2/17/2022 42,347 Orlando V LC Industrial 2/17/2022 34,828 Orlando VI LC Industrial 2/17/2022 28,694 Orlando VII LC Industrial 2/17/2022 23,532 1403 Gillingham Lane Industrial 6/10/2022 20,550 Industrial Drive IC Industrial 6/17/2022 4,018 Glen Afton IC Industrial 6/17/2022 22,036 East 56th Ave IC Industrial 6/17/2022 19,041 Brockton IC Industrial 6/17/2022 6,522 Pine Vista IC Industrial 6/17/2022 18,790 Tri-County Parkway IC Industrial 6/17/2022 12,784 Miami NW 114th IC Industrial 6/17/2022 12,022 North Harney IC Industrial 6/17/2022 8,026 Wes Warren Drive IC Industrial 6/17/2022 7,515 Enterprise Way IC Industrial 6/17/2022 6,519 New Albany IC Industrial 6/17/2022 17,544 Maplewood Drive IC Industrial 6/17/2022 5,514 1801 N. 5th Street Industrial 6/24/2022 23,305 350 Carter Road Office 4/27/2022 31,256 Total 2022 acquisitions $ 1,188,033 (1) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2022 acquisitions. During the nine months ended September 30, 2022, we allocated the purchase price of our acquisitions to land, building and intangible lease assets and liabilities as follows: For the Nine Months Ended ($ in thousands) September 30, 2022 Land $ 152,767 Building 999,305 Intangible lease assets 41,439 Above-market lease assets 696 Below-market lease liabilities (6,174) Total purchase price (1) $ 1,188,033 (1) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2022 acquisitions. The weighted-average amortization period for the intangible lease assets and liabilities acquired in connection with our acquisitions during the nine months ended September 30, 2022, as of the respective date of each acquisition, was 5.2 years. Dispositions During the nine months ended September 30, 2022, we sold six retail properties, one office property and one retail land parcel for net proceeds of approximately $274.8 million. We recorded a net gain on sale of approximately $94.8 million. During the nine months ended September 30, 2021, we sold one retail property, one industrial property, and two office properties for net proceeds of approximately $141.4 million. We recorded a net gain on sale of approximately $53.3 million. Intangible Lease Assets and Liabilities Intangible lease assets and liabilities, excluding properties classified as held for sale, as of September 30, 2022 and December 31, 2021 include the following: As of September 30, 2022 As of December 31, 2021 Accumulated Accumulated (in thousands) Gross Amortization Net Gross Amortization Net Intangible lease assets $ 292,530 $ (207,172) $ 85,358 $ 261,401 $ (186,820) $ 74,581 Above-market lease assets 22,899 (19,521) 3,378 22,727 (19,507) 3,220 Below-market lease liabilities (76,033) 32,381 (43,652) (80,206) 32,707 (47,499) Rental Revenue Adjustments and Depreciation and Amortization Expense The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities, and real estate-related depreciation and amortization expense: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Increase (decrease) to rental revenue: Straight-line rent adjustments $ 898 $ 2,798 $ 2,864 $ 4,667 Above-market lease amortization (185) (138) (538) (327) Below-market lease amortization 1,209 922 3,615 2,419 Real estate-related depreciation and amortization: Depreciation expense $ 26,118 $ 15,332 $ 71,665 $ 42,740 Intangible lease asset amortization 10,595 3,489 29,402 9,988 Real Estate Property Impairment During the nine months ended September 30, 2021, we recorded non-cash impairment charges of $0.8 million related to a retail property located in the Greater Boston market, which was disposed of in March 2021. Prior to the disposition, we reevaluated the fair value of the property and determined that the net book value of the property exceeded the respective contract sales price less costs to sell the property, resulting in the impairment. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 9 Months Ended |
Sep. 30, 2022 | |
ASSETS HELD FOR SALE | |
ASSETS HELD FOR SALE | 3. ASSETS HELD FOR SALE We classify a property as held for sale when certain criteria are met, in accordance with GAAP. Assets classified as held for sale are expected to be sold to a third party. At such time the property meets the held for sale criteria, the respective assets and liabilities are presented separately in the consolidated balance sheets and depreciation is no longer recognized. Assets held for sale are reported at the lower of their carrying amount or their estimated fair value less the costs to sell the assets. As of December 31, 2021, we had one retail property (Bandera Road) and one office property (1 st As of (in thousands) September 30, 2022 December 31, 2021 Net investment in real estate properties $ — $ 101,690 Other assets — 3,406 Assets held for sale $ — $ 105,096 Accounts payable and accrued expenses $ — $ 3,172 Intangible lease liabilities, net — 995 Other liabilities — 1,577 Liabilities related to assets held for sale $ — $ 5,744 |
INVESTMENTS IN UNCONSOLIDATED J
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investment And Joint Venture [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS | 4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS On November 30, 2021, we acquired interests in two joint venture partnerships, Pathfinder Core AREIT JV NNN Holdings, LLC (“Net Lease JV I”) and Pathfinder Core AREIT Net Lease Aggregator LLC (“Net Lease JV II”), for purposes of investing in properties across the U.S. with triple net lease agreements. On December 21, 2021, we also acquired interests in another joint venture partnership, AREIT-McDowell Vue Parent LLC (“Vue 1400 JV”), with third party investors for purposes of acquiring a 316 unit residential property in West Palm Beach, Florida. We record our investments in these joint venture partnerships under the equity method on our consolidated balance sheets as we have the ability to exercise significant influence in each partnership but do not have control of the entities. The following table summarizes our investments in unconsolidated joint venture partnerships as of September 30, 2022 and December 31, 2021: Investment in Unconsolidated Joint Ownership Venture Partnerships as of ($ in thousands) Segment Percentage September 30, 2022 December 31, 2021 Vue 1400 JV Residential 85% $ 26,038 $ 26,117 Net Lease JV I Net Lease 50% 16,393 16,267 Net Lease JV II Net Lease 50% 63,912 15,041 Total investment in unconsolidated joint venture partnerships $ 106,343 $ 57,425 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | 5. DEBT A summary of our consolidated debt is as follows: Weighted-Average Effective Interest Rate as of Balance as of September 30, December 31, September 30, December 31, ($ in thousands) 2022 2021 Current Maturity Date 2022 2021 Line of credit (1) 4.41 % 1.35 % November 2025 $ 185,000 $ 256,000 Term loan (2) 3.57 3.16 November 2026 400,000 325,000 Term loan (3) 4.39 3.19 January 2027 400,000 200,000 Fixed-rate mortgage notes 3.48 3.49 December 2025 - May 2031 380,546 381,954 Floating-rate mortgage notes (4) 4.52 2.26 October 2024 - October 2026 207,600 207,600 Total principal amount / weighted-average (5) 3.98 % 2.78 % $ 1,573,146 $ 1,370,554 Less: unamortized debt issuance costs $ (15,588) $ (16,762) Add: unamortized mark-to-market adjustment on assumed debt 8,667 9,442 Total debt, net $ 1,566,225 $ 1,363,234 Gross book value of properties encumbered by debt $ 969,752 $ 981,927 (1) The effective interest rate is calculated based on the Secured Overnight Financing Rate plus an 11.448 basis point adjustment (“Term SOFR”), plus a margin ranging from 1.25% to 2.00% depending on our consolidated leverage ratio. As of September 30, 2022, the unused and available portions under the line of credit were approximately $715.0 million and $573.3 million, respectively. The line of credit is available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. (2) The effective interest rate is calculated based on Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to approximately $300.0 million in borrowings under this term loan. (3) The effective interest rate is calculated based on Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to approximately $350.0 million in borrowings under this term loan. (4) The effective interest rate is calculated based on the London Interbank Offered Rate (“LIBOR”) plus a margin. As of both September 30, 2022 and December 31, 2021, our floating-rate mortgage notes were subject to interest rate spreads ranging from 1.55% to 2.50% . As of September 30, 2022, our floating-rate mortgage notes were capped at 4.50% and 4.55% through interest rate cap agreements. (5) The weighted-average remaining term of our consolidated borrowings was approximately 4.2 years as of September 30, 2022, excluding the impact of certain extension options. As of September 30, 2022, the principal payments due on our consolidated debt during each of the next five years and thereafter were as follows: (in thousands) Line of Credit (1) Term Loans Mortgage Notes Total Remainder of 2022 $ — $ — $ 204 $ 204 2023 — — 1,463 1,463 2024 — — 129,265 129,265 2025 185,000 — 72,360 257,360 2026 — 400,000 84,214 484,214 Thereafter — 400,000 300,640 700,640 Total principal payments $ 185,000 $ 800,000 $ 588,146 $ 1,573,146 (1) The term of the line of credit may be extended pursuant to two six-month extension options, subject to certain conditions. In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee (“ARRC”), which identified the Secured Overnight Financing Rate as its preferred alternative rate for LIBOR in derivatives and other financial contracts. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form. LIBOR is expected to be phased out or modified by June 2023. As of September 30, 2022, certain of our mortgage notes have initial or extended maturity dates beyond 2023 with exposure to LIBOR. The agreements governing these loans provide procedures for determining a replacement or alternative base rate in the event that LIBOR is discontinued. However, there can be no assurances as to whether such replacement or alternative base rate will be more or less favorable than LIBOR. We intend to monitor the developments with respect to the phasing out of LIBOR after 2023 and work with our lenders to seek to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR. Debt Covenants Our line of credit, term loans and mortgage note agreements contain various property-level covenants, including customary affirmative and negative covenants. In addition, the line of credit and term loan agreements contain certain corporate-level financial covenants, including leverage ratio, fixed charge coverage ratio, and tangible net worth thresholds. We were in compliance with our debt covenants as of September 30, 2022. Derivative Instruments To manage interest rate risk for certain of our variable-rate debt, we use interest rate derivative instruments as part of our risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by either providing a fixed interest rate or capping the variable interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the interest rate swap agreements without exchange of the underlying notional amount. Interest rate caps involve the receipt of variable amounts from a counterparty at the end of each period in which the interest rate exceeds the agreed fixed price. Interest rate caps are not designated as hedges. Certain of our variable-rate borrowings are not hedged, and therefore, to an extent, we have ongoing exposure to interest rate movements. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss is recorded as a component of accumulated other comprehensive income (loss) (“AOCI”) on the condensed consolidated balance sheets and is reclassified into earnings as interest expense for the same period that the hedged transaction affects earnings, which is when the interest expense is recognized on the related debt. During the next 12 months, we estimate that approximately $10.2 million will be reclassified as a decrease to interest expense related to active effective hedges of existing floating-rate debt. Our interest rate cap derivative instruments are not designated as hedges and therefore, changes in fair value must be recognized through income. As a result, in periods with high interest rate volatility, we may experience significant fluctuations in our net income (loss). The following table summarizes the location and fair value of our consolidated derivative instruments on our condensed consolidated balance sheets: Number of Fair Value ($ in thousands) Contracts Notional Amount Other Assets Other Liabilities As of September 30, 2022 Interest rate swaps 12 $ 650,000 $ 20,148 $ — Interest rate caps 2 207,600 4,341 — Total derivative instruments 14 $ 857,600 $ 24,489 $ — As of December 31, 2021 Interest rate swaps 13 $ 500,000 $ 164 $ 11,236 Interest rate caps 2 207,600 159 — Total derivative instruments 15 $ 707,600 $ 323 $ 11,236 The following table presents the effect of our consolidated derivative instruments on our condensed consolidated financial statements: For the Three Months Ended For the Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 Derivative instruments designated as cash flow hedges: Gain (loss) recognized in AOCI $ 17,114 $ (224) $ 27,976 $ 2,519 Amount reclassified from AOCI into interest expense 331 2,537 3,282 7,740 Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded 42,255 17,866 100,439 51,477 Derivative instruments not designated as cash flow hedges: Gain (loss) recognized in other income $ 1,691 $ — $ 4,223 $ (13) |
DST PROGRAM
DST PROGRAM | 9 Months Ended |
Sep. 30, 2022 | |
Delaware Statutory Trust Program [Abstract] | |
DST PROGRAM | 6. DST PROGRAM We have a program to raise capital through private placement offerings by selling beneficial interests (the “DST Interests”) in specific Delaware statutory trusts holding real properties (the “DST Program”). In order to facilitate additional capital raise through the DST Program, we have made and may continue to offer loans (“DST Program Loans”) to finance a portion of the sale of DST Interests to potential investors. As of September 30, 2022 and December 31, 2021, there were approximately $88.6 million and $62.1 million, respectively, of outstanding DST Program Loans that we have made to partially finance the sale of DST Interests. We include our investments in DST Program Loans separately on our condensed consolidated balance sheets in the DST Program Loans line item and we include income earned from DST Program Loans in other income on our condensed consolidated statements of operations. We do not have a significant credit concentration with any individual purchaser as a result of DST Program Loans. The following table presents our DST Program activity for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended For the Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 DST Interests sold $ 212,118 $ 73,049 $ 654,781 $ 187,972 DST Interests financed by DST Program Loans 17,286 5,349 45,318 17,105 Income earned from DST Program Loans (1) 942 577 2,443 1,586 Financing obligation liability appreciation (2) 12,189 1,670 24,721 4,181 Rent obligation incurred under master lease agreements (2) 12,708 7,361 33,565 20,697 (1) Included in other income and expenses on condensed consolidated statements of operations. (2) Included in interest expense on condensed consolidated statements of operations. Additionally, during the nine months ended September 30, 2022 and 2021, 15.8 million partnership units (“OP Units”) in our operating partnership, AREIT Operating Partnership LP (the “Operating Partnership”) and 7.6 million OP Units, respectively were issued in exchange for DST Interests, for a net investment of $136.9 million and $57.7 million, respectively, in accordance with our Umbrella Partnership Real Estate Investment Trust (“UPREIT”) structure. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 7. FAIR VALUE We estimate the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of the amounts that we would realize upon disposition. Fair Value Measurements on a Recurring Basis The following table presents our financial instruments measured at fair value on a recurring basis: Total (in thousands) Level 1 Level 2 Level 3 Fair Value As of September 30, 2022 Assets: Derivative instruments $ — $ 24,489 $ — $ 24,489 Total assets measured at fair value $ — $ 24,489 $ — $ 24,489 Liabilities: Derivative instruments $ — $ — $ — $ — Total liabilities measured at fair value $ — $ — $ — $ — As of December 31, 2021 Assets: Derivative instruments $ — $ 323 $ — $ 323 Total assets measured at fair value $ — $ 323 $ — $ 323 Liabilities: Derivative instruments $ — $ 11,236 $ — $ 11,236 Total liabilities measured at fair value $ — $ 11,236 $ — $ 11,236 The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Derivative Instruments. Nonrecurring Fair Value Measurements As of September 30, 2022 and December 31, 2021, the fair values of cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, and distributions payable approximate their carrying values because of the short-term nature of these instruments. The table below includes fair values for certain of our financial instruments for which it is practicable to estimate fair value. The carrying values and fair values of these financial instruments were as follows: As of September 30, 2022 As of December 31, 2021 Carrying Fair Carrying Fair (in thousands) Value (1) Value Value (1) Value Assets: Debt-related investments $ 152,927 $ 152,463 $ 106,463 $ 106,463 DST Program Loans 88,597 84,596 62,123 62,123 Liabilities: Line of credit $ 185,000 $ 185,000 $ 256,000 $ 256,000 Term loans 800,000 800,000 525,000 525,000 Mortgage notes 588,146 538,881 589,554 600,467 (1) The carrying value reflects the principal amount outstanding. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
EQUITY | 8. EQUITY Public Offerings We intend to conduct a continuous public offering that will not have a predetermined duration, subject to continued compliance with the rules and regulations of the SEC and applicable state laws. On May 3, 2022, the SEC declared our registration statement on Form S-11 with respect to our fourth public offering of up to $10.0 billion of shares of its common stock effective, and the fourth public offering commenced the same day. We ceased selling shares of our common stock under our third public offering of up to $3.0 billion of shares immediately upon the effectiveness of the registration statement for the fourth public offering. Under the fourth public offering, we are offering up to $8.5 billion of shares of our common stock in the primary offering and up to $1.5 billion of shares of our common stock pursuant to our distribution reinvestment plan, in any combination of Class T shares, Class D shares, Class S shares, and Class I shares. We may reallocate amounts between the primary offering and distribution reinvestment plan. Pursuant to our public offerings, we offered and continue to offer shares of our common stock at the “transaction price,” plus applicable upfront selling commissions and dealer manager fees. The “transaction price” generally is equal to the net asset value (“NAV”) per share of our common stock most recently disclosed. Our NAV per share is calculated as of the last calendar day of each month for each of our outstanding classes of stock, and will be available generally within 15 calendar days after the end of the applicable month. Shares issued pursuant to our distribution reinvestment plan are offered at the transaction price, as indicated above, in effect on the distribution date. We may update a previously disclosed transaction price in cases where we believe there has been a material change (positive or negative) to our NAV per share relative to the most recently disclosed monthly NAV per share. During the nine months ended September 30, 2022, we raised gross proceeds of approximately $332.4 million from the sale of approximately 38.6 million shares of our common stock in our ongoing public offerings, including proceeds from our distribution reinvestment plan of approximately $21.6 million. Common Stock The following table describes the changes in each class of common shares during the periods presented below: Class T Class S Class D Class I Class E Total (in thousands) Shares Shares Shares Shares Shares Shares FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 Balance as of June 30, 2021 11,692 28,958 5,509 47,745 58,117 152,021 Issuance of common stock: Primary shares 2,202 3,245 568 3,483 — 9,498 Distribution reinvestment plan 69 162 32 282 225 770 Share-based compensation — — — 21 — 21 Redemptions of common stock (64) (217) (119) (442) (1,083) (1,925) Conversions (217) — — 217 — — Balance as of September 30, 2021 13,682 32,148 5,990 51,306 57,259 160,385 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 Balance as of June 30, 2022 21,672 46,163 7,947 64,741 54,578 195,101 Issuance of common stock: Primary shares 2,994 2,303 135 3,483 — 8,915 Distribution reinvestment plan 109 211 39 321 181 861 Share-based compensation — — — 27 — 27 Redemptions of common stock (49) (531) (188) (417) (1,102) (2,287) Conversions (14) — — 14 — — Balance as of September 30, 2022 24,712 48,146 7,933 68,169 53,657 202,617 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 Balance as of December 31, 2020 9,831 23,516 4,098 44,723 60,873 143,041 Issuance of common stock: Primary shares 4,118 8,873 2,024 6,664 — 21,679 Distribution reinvestment plan 188 444 86 824 695 2,237 Share-based compensation — — — 29 — 29 Redemptions of common stock (163) (685) (218) (1,226) (4,309) (6,601) Conversions (292) — — 292 — — Balance as of September 30, 2021 13,682 32,148 5,990 51,306 57,259 160,385 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 Balance as of December 31, 2021 16,425 35,757 6,749 54,406 56,328 169,665 Issuance of common stock: Primary shares 8,183 12,627 1,628 13,666 — 36,104 Distribution reinvestment plan 301 604 114 928 569 2,516 Share-based compensation — — — 27 — 27 Redemptions of common stock (82) (842) (558) (973) (3,240) (5,695) Conversions (115) — — 115 — — Balance as of September 30, 2022 24,712 48,146 7,933 68,169 53,657 202,617 Distributions The following table summarizes our distribution activity (including distributions to noncontrolling interests and distributions reinvested in shares of our common stock) for the periods below: Amount Common Stock Declared per Distributions Other Cash Reinvested in Distribution Gross (in thousands, except per share data) Common Share (1) Paid in Cash Distributions (2) Shares Fees (3) Distributions (4) 2022 March 31 $ 0.09375 $ 8,837 $ 3,018 $ 6,876 $ 1,030 $ 19,761 June 30 0.09375 9,299 3,157 7,362 1,259 21,077 September 30 0.09375 9,684 3,972 7,732 1,399 22,787 Total $ 0.28125 $ 27,820 $ 10,147 $ 21,970 $ 3,688 $ 63,625 2021 March 31 $ 0.09375 $ 7,562 $ 1,424 $ 5,526 $ 586 $ 15,098 June 30 0.09375 7,696 1,611 5,723 655 15,685 September 30 0.09375 7,984 1,854 5,985 759 16,582 December 31 0.09375 8,265 2,446 6,361 885 17,957 Total $ 0.37500 $ 31,507 $ 7,335 $ 23,595 $ 2,885 $ 65,322 (1) Amount reflects the total gross quarterly distribution rate authorized by our board of directors per Class T share, per Class S share, per Class D share, per Class I share, and per Class E share of common stock. Distributions were declared and paid as of monthly record dates. These monthly distributions have been aggregated and presented on a quarterly basis. The distributions on Class T shares, Class S shares and Class D shares of common stock are reduced by the respective distribution fees that are payable with respect to Class T shares, Class S shares and Class D shares. (2) Consists of distribution fees paid to Ares Wealth Management Solutions, LLC (the “Dealer Manager”) with respect to OP Units and distributions paid to holders of OP Units and other noncontrolling interest holders. (3) Distribution fees are paid monthly to the Dealer Manager, with respect to Class T shares, Class S shares and Class D shares issued in the primary portion of our public offerings only. All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (4) Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares, Class S shares and Class D shares issued in the primary portion of our public offerings. Redemptions and Repurchases Below is a summary of redemptions and repurchases pursuant to our share redemption program for the nine months ended September 30, 2022 and 2021. Our board of directors may modify or suspend our current share redemption programs if it deems such action to be in the best interest of our stockholders. For the Nine Months Ended September 30, (in thousands, except for per share data) 2022 2021 Number of shares redeemed or repurchased 5,695 6,601 Aggregate dollar amount of shares redeemed or repurchased $ 48,783 $ 50,130 Average redemption or repurchase price per share $ 8.57 $ 7.59 |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS | 9 Months Ended |
Sep. 30, 2022 | |
Redeemable Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS | 9. REDEEMABLE NONCONTROLLING INTERESTS The Operating Partnership’s net income and loss will generally be allocated to the general partner and the limited partners in accordance with the respective percentage interest in the OP Units issued by the Operating Partnership. The Operating Partnership issued OP Units to the Advisor and Former Sponsor as payment of the performance participation allocation (also referred to as the performance component of the advisory fee) pursuant to the amended and restated advisory agreement, by and among the Company, the Operating Partnership and our Advisor. The Advisor and Former Sponsor subsequently transferred these OP Units to its members or their affiliates or redeemed for cash. We have classified these OP Units as redeemable noncontrolling interests in mezzanine equity on the condensed consolidated balance sheets due to the fact that, as provided in the agreement of limited partnership of the Operating Partnership (the “Partnership Agreement”), the limited partners who hold these OP Units have the ability to tender the OP Units at any time irrespective of the period that they have held such OP Units, and the Operating Partnership is required to satisfy such redemption for cash unless such cash redemption would be prohibited by applicable law or the Partnership Agreement, in which case such OP Units will be redeemed for shares of the Company’s common stock of the class corresponding to the class of such OP Units. The redeemable noncontrolling interests are recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such OP Units at the end of each measurement period. The following table summarizes the redeemable noncontrolling interests activity for the nine months ended September 30, 2022 and 2021: For the Nine Months Ended September 30, ($ in thousands) 2022 2021 Balance at beginning of the year $ 8,994 $ 3,798 Settlement of prior year performance participation allocation (1) 15,327 4,608 Distributions to redeemable noncontrolling interests (543) (314) Redemptions to redeemable noncontrolling interests (2) (7,724) — Net (loss) income attributable to redeemable noncontrolling interests (67) 169 Change from cash flow hedging activities attributable to redeemable noncontrolling interests 283 70 Redemption value allocation adjustment to redeemable noncontrolling interests 1,900 293 Ending balance $ 18,170 $ 8,624 (1) The 2021 performance participation allocation in the amount of $15.3 million became payable on December 31, 2021, and was issued as 1.9 million Class I OP Units in January 2022. At the direction of the Advisor and in light of our Former Sponsor having been the holder of a separate series of partnership interests in the Operating Partnership with special distribution rights (the “Special Units”) for the first six months of 2021, the holder of the Special Units designated 465,000 of these Class I OP Units to an entity owned indirectly by our Chairman, Mr. Mulvihill, and 465,000 of these Class I OP Units to an entity owned indirectly by a member of our Former Sponsor. The holder of the Special Units transferred 945,000 Class I OP Units to the Advisor thereafter. The 2020 performance participation allocation in the amount of $4.6 million became payable to the Former Sponsor, as the former holder of the Special Units, on December 31, 2020. At the Former Advisor’s election, it was paid in the form of Class I OP Units valued at $4.6 million (based on the NAV per unit as of December 31, 2020), which were issued to the Former Sponsor in January 2021 and subsequently transferred to its members or their affiliates. (2) At the request of the Advisor, the Operating Partnership redeemed all Class I OP Units issued to the Advisor in January 2022 for $7.7 million. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS Summary of Fees and Expenses The table below summarizes the fees and expenses incurred by us for services provided by the Advisor and its affiliates, and by the Dealer Manager related to the services the Dealer Manager provided in connection with our public offerings and any related amounts payable: For the Three Months Ended September 30, For the Nine Months Ended September 30, Payable as of (in thousands) 2022 2021 2022 2021 September 30, 2022 December 31, 2021 Selling commissions and dealer manager fees (1) $ 1,614 $ 845 $ 4,480 $ 1,866 $ — $ — Ongoing distribution fees (1)(2) 1,416 788 3,745 2,064 638 394 Advisory fees—fixed component 8,980 5,480 24,351 15,389 3,058 2,094 Performance participation allocation 3,710 3,774 22,088 7,769 22,088 15,327 Other expense reimbursements—Advisor (3)(4) 2,962 2,950 8,308 8,783 2,597 1,443 Other expense reimbursements—Dealer Manager 99 107 269 249 84 — Property accounting fee (5) 508 — 811 — 811 — DST Program selling commissions, dealer manager and distribution fees (1) 5,994 3,106 19,178 6,422 264 219 Other DST Program related costs—Advisor (4) 4,217 1,710 12,617 3,978 150 87 Total $ 29,500 $ 18,760 $ 95,847 $ 46,520 $ 29,690 $ 19,564 (1) All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (2) The distribution fees are payable monthly in arrears. Additionally, we accrue for future estimated amounts payable related to ongoing distribution fees. The future estimated amounts payable of approximately $55.4 million and $34.1 million as of September 30, 2022 and December 31, 2021, respectively, are included in other liabilities on the consolidated balance sheets. (3) Other expense reimbursements include certain expenses incurred for organization and offering, acquisition and general administrative services provided to us under the advisory agreement, including, but not limited to, certain expenses described after this footnote, allocated rent paid to both third parties and affiliates of our Advisor, equipment, utilities, insurance, travel and entertainment. (4) Includes costs reimbursed to the Advisor related to the DST Program. (5) The cost of the property management fee, including the property accounting fee, is generally borne by the tenant or tenants at each real property, either via a direct reimbursement to us or, in the case of tenants subject to a gross lease, as part of the lease cost. In certain circumstances, we may pay for a portion of the property management fee, including the property accounting fee, without reimbursement from the tenant or tenants at a real property. Certain of the expense reimbursements described in the table above include a portion of the compensation expenses of officers and employees of the Advisor or its affiliates related to activities for which the Advisor did not otherwise receive a separate fee. Amounts incurred related to these compensation expenses for the three months ended September 30, 2022, and 2021 were approximately $2.6 million and $2.6 million, respectively. Amounts incurred related to these compensation expenses for the nine months ended September 30, 2022, and 2021 were approximately $7.9 million and $7.3 million, respectively. No reimbursement is made for compensation of our named executive officers unless the named executive officer is providing stockholder services, as outlined in the advisory agreement. Property-Level Accounting Services. reflects the market rate for all real property management services, including property-level accounting services, based on rates charged for similar properties within the region or market in which the real property is located, and (ii) the amount paid to third-party property management firms for property management services, which fee is based on an arm’s length negotiation with a third party property management service provider (the difference between (i) and (ii), the “property accounting fee”). Performance Participation Allocation As used below, “Fund Interests” means our outstanding shares of common stock, along with OP Units, which may be or were held directly or indirectly by the Advisor, the Former Sponsor, members or affiliates of the Former Sponsor, and third parties. The performance participation allocation is a performance-based amount that will be paid to the Advisor. This amount is calculated on the basis of the overall investment return provided to holders of Fund Interests (i.e., our outstanding shares and OP Units held by third-party investors) in any calendar year such that the Advisor will receive the lesser of (1) 12.5% of (a) the annual total return amount less (b) any loss carryforward, and (2) the amount equal to (x) the annual total return amount, less (y) any loss carryforward, less (z) the amount needed to achieve an annual total return amount equal to 5% of the NAV per Fund Interest at the beginning of such year (the “Hurdle Amount”). The foregoing calculations are calculated on a per Fund Interest basis and multiplied by the weighted-average Fund Interests outstanding during the year. In no event will the performance participation allocation be less than zero. Accordingly, if the annual total return amount exceeds the Hurdle Amount plus the amount of any loss carryforward, then the Advisor will earn a performance participation allocation equal to 100% of such excess, but limited to 12.5% of the annual total return amount that is in excess of the loss carryforward. The allocation of the performance participation interest is ultimately determined at the end of each calendar year and will be paid in Class I OP units or cash, at the election of the Advisor. As the performance hurdle was achieved as of both September 30, 2022 and 2021, we recognized approximately $3.7 million and $3.8 million for the three months ended September 30, 2022 and 2021, respectively, and $22.1 million and $7.8 million for the nine months ended September 30, 2022 and 2021, respectively, of performance participation allocation expense in our condensed consolidated statements of operations. |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER COMMON SHARE | 11. NET INCOME (LOSS) PER COMMON SHARE The computation of our basic and diluted net income (loss) per share attributable to common stockholders is as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands, except per share data) 2022 2021 2022 2021 Net (loss) income attributable to common stockholders—basic $ (24,872) $ 13,940 $ (9,449) $ 22,922 Net (loss) income attributable to redeemable noncontrolling interests (253) 99 (67) 169 Net (loss) income attributable to noncontrolling interests (4,996) 1,654 (2,378) 2,430 Net (loss) income attributable to common stockholders—diluted $ (30,121) $ 15,693 $ (11,894) $ 25,521 Weighted-average shares outstanding—basic 200,667 157,025 190,199 151,045 Incremental weighted-average shares effect of conversion of noncontrolling interests 42,327 19,752 36,095 17,430 Weighted-average shares outstanding—diluted 242,994 176,777 226,294 168,475 Net (loss) income per share attributable to common stockholders: Basic $ (0.12) $ 0.09 $ (0.05) $ 0.15 Diluted $ (0.12) $ 0.09 $ (0.05) $ 0.15 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | 12. SUPPLEMENTAL CASH FLOW INFORMATION Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows: For the Nine Months Ended September 30, (in thousands) 2022 2021 Distributions reinvested in common stock $ 21,555 $ 17,001 Change in accrued future ongoing distribution fees 21,371 10,864 Net increase in DST Program Loans receivable through DST Program capital raising 45,318 17,105 Settlement of DST Program Loans through issuance of OP Units 18,695 4,058 Redeemable noncontrolling interest issued as settlement of performance participation allocation 15,327 4,608 Issuances of OP Units for DST Interests 136,905 57,729 Restricted Cash Restricted cash consists of lender and property-related escrow accounts. The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows: For the Nine Months Ended September 30, (in thousands) 2022 2021 Beginning of period: Cash and cash equivalents $ 10,605 $ 11,266 Restricted cash 3,747 10,468 Cash, cash equivalents and restricted cash $ 14,352 $ 21,734 End of period: Cash and cash equivalents $ 24,245 $ 12,463 Restricted cash 3,788 10,533 Cash, cash equivalents and restricted cash $ 28,033 $ 22,996 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Litigation We and the Operating Partnership are not presently involved in any material litigation nor, to our knowledge, is any material litigation threatened against us or our investments. Environmental Matters A majority of the properties we acquire are subject to environmental reviews either by us or the previous owners. In addition, we may incur environmental remediation costs associated with certain land parcels we may acquire in connection with the development of the land. We have acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous materials. We may purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. We are not aware of any environmental liabilities that we believe would have a material adverse effect on our business, financial condition, or results of operations as of September 30, 2022. |
SEGMENT FINANCIAL INFORMATION
SEGMENT FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT FINANCIAL INFORMATION | 14. SEGMENT FINANCIAL INFORMATION Our four reportable segments are office, retail, residential and industrial. Factors used to determine our reportable segments include the physical and economic characteristics of our properties and the related operating activities. Our chief operating decision makers rely on net operating income, among other factors, to make decisions about allocating resources and assessing segment performance. Net operating income is the key performance metric that captures the unique operating characteristics of each segment. Net investment in real estate properties, restricted cash, tenant receivables, straight-line rent receivables, and other assets directly assignable to a property are allocated to the segment groupings. Corporate items that are not directly assignable to a property, such as investment in unconsolidated joint venture partnerships, debt-related investments and DST Program Loans, are not allocated to segment groupings, but are reflected as reconciling items. The following table reflects our total consolidated assets by business segment as of September 30, 2022 and December 31, 2021: As of (in thousands) September 30, 2022 December 31, 2021 (1) Assets: Office properties $ 367,711 $ 335,811 Retail properties 541,881 639,584 Residential properties 1,504,078 837,491 Industrial properties 1,265,691 826,353 Corporate 394,316 351,732 Total assets $ 4,073,677 $ 2,990,971 (1) As of December 31, 2021, amounts held for sale are included in the corporate grouping. Refer to “Note 3” for further detail. The following table sets forth consolidated financial results by segment for the three and nine months ended September 30, 2022 and 2021: (in thousands) Office Retail Residential Industrial Consolidated For the Three Months Ended September 30, 2022 Rental revenues $ 13,065 $ 15,303 $ 28,047 $ 20,573 $ 76,988 Rental expenses (6,296) (4,421) (12,261) (5,117) (28,095) Net operating income $ 6,769 $ 10,882 $ 15,786 $ 15,456 $ 48,893 Real estate-related depreciation and amortization $ 3,746 $ 4,140 $ 13,490 $ 15,337 $ 36,713 For the Three Months Ended September 30, 2021 Rental revenues $ 16,887 $ 18,679 $ 7,237 $ 10,793 $ 53,596 Rental expenses (7,111) (4,660) (3,257) (2,814) (17,842) Net operating income $ 9,776 $ 14,019 $ 3,980 $ 7,979 $ 35,754 Real estate-related depreciation and amortization $ 4,945 $ 5,336 $ 2,283 $ 6,257 $ 18,821 For the Nine Months Ended September 30, 2022 Rental revenues $ 39,845 $ 48,879 $ 70,225 $ 54,038 $ 212,987 Rental expenses (18,259) (12,826) (30,265) (12,955) (74,305) Net operating income $ 21,586 $ 36,053 $ 39,960 $ 41,083 $ 138,682 Real estate-related depreciation and amortization $ 11,986 $ 13,268 $ 37,882 $ 37,931 $ 101,067 For the Nine Months Ended September 30, 2021 Rental revenues $ 49,663 $ 53,600 $ 20,885 $ 28,509 $ 152,657 Rental expenses (22,116) (13,854) (9,666) (6,682) (52,318) Net operating income $ 27,547 $ 39,746 $ 11,219 $ 21,827 $ 100,339 Real estate-related depreciation and amortization $ 14,814 $ 14,445 $ 7,612 $ 15,857 $ 52,728 We consider net operating income to be an appropriate supplemental performance measure and believe net operating income provides useful information to our investors regarding our financial condition and results of operations because net operating income reflects the operating performance of our properties and excludes certain items that are not considered to be controllable in connection with the management of the properties, such as real estate-related depreciation and amortization, general and administrative expenses, advisory fees, impairment charges, interest expense, gains on sale of properties, other income and expense, gains and losses on the extinguishment of debt and noncontrolling interests. However, net operating income should not be viewed as an alternative measure of our financial performance since it excludes such items, which could materially impact our results of operations. Further, our net operating income may not be comparable to that of other real estate companies, as they may use different methodologies for calculating net operating income. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance. The following table is a reconciliation of our reported net income (loss) attributable to common stockholders to our net operating income for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended For the Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 Net (loss) income attributable to common stockholders $ (24,872) $ 13,940 $ (9,449) $ 22,922 Debt-related income (1,548) (2,298) (5,862) (6,741) Real estate-related depreciation and amortization 36,713 18,821 101,067 52,728 General and administrative expenses 3,155 2,183 7,786 6,582 Advisory fees 8,980 5,480 24,351 15,389 Performance participation allocation 3,710 3,774 22,088 7,769 Acquisition costs and reimbursements 1,176 738 3,898 1,451 Impairment of real estate property — — — 758 Equity in income from unconsolidated joint venture partnerships (1,590) — (2,298) — Interest expense 42,255 17,866 100,439 51,477 Gain on sale of real estate property (11,303) (25,979) (94,827) (53,321) Loss on extinguishment of debt and financing commitments, net — — 8 — Other income (2,534) (524) (6,074) (1,274) Net (loss) income attributable to redeemable noncontrolling interests (253) 99 (67) 169 Net (loss) income attributable to noncontrolling interests (4,996) 1,654 (2,378) 2,430 Net operating income $ 48,893 $ 35,754 $ 138,682 $ 100,339 |
INVESTMENTS IN REAL ESTATE PR_2
INVESTMENTS IN REAL ESTATE PROPERTIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Schedule of Consolidated Investments in Real Estate Properties | The following table summarizes our consolidated investments in real estate properties and excludes properties classified as held for sale. Refer to “Note 3” for detail relating to our real estate properties held for sale. As of (in thousands) September 30, 2022 December 31, 2021 Land $ 693,409 $ 583,728 Buildings and improvements 3,136,259 2,180,358 Intangible lease assets 315,429 284,128 Right of use asset 13,637 13,637 Investment in real estate properties 4,158,734 3,061,851 Accumulated depreciation and amortization (539,015) (472,025) Net investment in real estate properties $ 3,619,719 $ 2,589,826 |
Schedule of Asset Acquisitions | During the nine months ended September 30, 2022, we acquired 100% of the following properties, all of which were determined to be asset acquisitions: ($ in thousands) Property Type Acquisition Date Total Purchase Price (1) 2022 Acquisitions: Skye 750 Residential 1/5/2022 $ 92,845 Arabelle City Center Residential 4/12/2022 156,781 Dallas Cityline Residential 4/13/2022 111,093 Dallas Wycliff Residential 4/13/2022 94,083 Dallas Maple District Residential 4/13/2022 93,089 San Vance Residential 4/13/2022 77,586 San Stone Oak Residential 4/13/2022 72,605 General Washington IC Industrial 1/7/2022 11,051 Western Foods Center Industrial 1/14/2022 39,298 Orlando I & II LC Industrial 2/17/2022 94,759 Orlando III & IV LC Industrial 2/17/2022 42,347 Orlando V LC Industrial 2/17/2022 34,828 Orlando VI LC Industrial 2/17/2022 28,694 Orlando VII LC Industrial 2/17/2022 23,532 1403 Gillingham Lane Industrial 6/10/2022 20,550 Industrial Drive IC Industrial 6/17/2022 4,018 Glen Afton IC Industrial 6/17/2022 22,036 East 56th Ave IC Industrial 6/17/2022 19,041 Brockton IC Industrial 6/17/2022 6,522 Pine Vista IC Industrial 6/17/2022 18,790 Tri-County Parkway IC Industrial 6/17/2022 12,784 Miami NW 114th IC Industrial 6/17/2022 12,022 North Harney IC Industrial 6/17/2022 8,026 Wes Warren Drive IC Industrial 6/17/2022 7,515 Enterprise Way IC Industrial 6/17/2022 6,519 New Albany IC Industrial 6/17/2022 17,544 Maplewood Drive IC Industrial 6/17/2022 5,514 1801 N. 5th Street Industrial 6/24/2022 23,305 350 Carter Road Office 4/27/2022 31,256 Total 2022 acquisitions $ 1,188,033 (1) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2022 acquisitions. |
Allocation of Purchase Price Allocations | During the nine months ended September 30, 2022, we allocated the purchase price of our acquisitions to land, building and intangible lease assets and liabilities as follows: For the Nine Months Ended ($ in thousands) September 30, 2022 Land $ 152,767 Building 999,305 Intangible lease assets 41,439 Above-market lease assets 696 Below-market lease liabilities (6,174) Total purchase price (1) $ 1,188,033 (1) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2022 acquisitions. |
Schedule of Intangible Lease Assets and Liabilities | Intangible lease assets and liabilities, excluding properties classified as held for sale, as of September 30, 2022 and December 31, 2021 include the following: As of September 30, 2022 As of December 31, 2021 Accumulated Accumulated (in thousands) Gross Amortization Net Gross Amortization Net Intangible lease assets $ 292,530 $ (207,172) $ 85,358 $ 261,401 $ (186,820) $ 74,581 Above-market lease assets 22,899 (19,521) 3,378 22,727 (19,507) 3,220 Below-market lease liabilities (76,033) 32,381 (43,652) (80,206) 32,707 (47,499) |
Summary of Rental Revenue and Depreciation and Amortization Expense | The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities, and real estate-related depreciation and amortization expense: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Increase (decrease) to rental revenue: Straight-line rent adjustments $ 898 $ 2,798 $ 2,864 $ 4,667 Above-market lease amortization (185) (138) (538) (327) Below-market lease amortization 1,209 922 3,615 2,419 Real estate-related depreciation and amortization: Depreciation expense $ 26,118 $ 15,332 $ 71,665 $ 42,740 Intangible lease asset amortization 10,595 3,489 29,402 9,988 |
ASSETS HELD FOR SALE (Tables)
ASSETS HELD FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
ASSETS HELD FOR SALE | |
Schedule of assets held for sale | The following table summarizes the amounts held for sale as of September 30, 2022 and December 31, 2021: As of (in thousands) September 30, 2022 December 31, 2021 Net investment in real estate properties $ — $ 101,690 Other assets — 3,406 Assets held for sale $ — $ 105,096 Accounts payable and accrued expenses $ — $ 3,172 Intangible lease liabilities, net — 995 Other liabilities — 1,577 Liabilities related to assets held for sale $ — $ 5,744 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investment And Joint Venture [Abstract] | |
Equity method investments | The following table summarizes our investments in unconsolidated joint venture partnerships as of September 30, 2022 and December 31, 2021: Investment in Unconsolidated Joint Ownership Venture Partnerships as of ($ in thousands) Segment Percentage September 30, 2022 December 31, 2021 Vue 1400 JV Residential 85% $ 26,038 $ 26,117 Net Lease JV I Net Lease 50% 16,393 16,267 Net Lease JV II Net Lease 50% 63,912 15,041 Total investment in unconsolidated joint venture partnerships $ 106,343 $ 57,425 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | A summary of our consolidated debt is as follows: Weighted-Average Effective Interest Rate as of Balance as of September 30, December 31, September 30, December 31, ($ in thousands) 2022 2021 Current Maturity Date 2022 2021 Line of credit (1) 4.41 % 1.35 % November 2025 $ 185,000 $ 256,000 Term loan (2) 3.57 3.16 November 2026 400,000 325,000 Term loan (3) 4.39 3.19 January 2027 400,000 200,000 Fixed-rate mortgage notes 3.48 3.49 December 2025 - May 2031 380,546 381,954 Floating-rate mortgage notes (4) 4.52 2.26 October 2024 - October 2026 207,600 207,600 Total principal amount / weighted-average (5) 3.98 % 2.78 % $ 1,573,146 $ 1,370,554 Less: unamortized debt issuance costs $ (15,588) $ (16,762) Add: unamortized mark-to-market adjustment on assumed debt 8,667 9,442 Total debt, net $ 1,566,225 $ 1,363,234 Gross book value of properties encumbered by debt $ 969,752 $ 981,927 (1) The effective interest rate is calculated based on the Secured Overnight Financing Rate plus an 11.448 basis point adjustment (“Term SOFR”), plus a margin ranging from 1.25% to 2.00% depending on our consolidated leverage ratio. As of September 30, 2022, the unused and available portions under the line of credit were approximately $715.0 million and $573.3 million, respectively. The line of credit is available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. (2) The effective interest rate is calculated based on Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to approximately $300.0 million in borrowings under this term loan. (3) The effective interest rate is calculated based on Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to approximately $350.0 million in borrowings under this term loan. (4) The effective interest rate is calculated based on the London Interbank Offered Rate (“LIBOR”) plus a margin. As of both September 30, 2022 and December 31, 2021, our floating-rate mortgage notes were subject to interest rate spreads ranging from 1.55% to 2.50% . As of September 30, 2022, our floating-rate mortgage notes were capped at 4.50% and 4.55% through interest rate cap agreements. (5) The weighted-average remaining term of our consolidated borrowings was approximately 4.2 years as of September 30, 2022, excluding the impact of certain extension options. |
Schedule of Maturities of Long-term Debt | As of September 30, 2022, the principal payments due on our consolidated debt during each of the next five years and thereafter were as follows: (in thousands) Line of Credit (1) Term Loans Mortgage Notes Total Remainder of 2022 $ — $ — $ 204 $ 204 2023 — — 1,463 1,463 2024 — — 129,265 129,265 2025 185,000 — 72,360 257,360 2026 — 400,000 84,214 484,214 Thereafter — 400,000 300,640 700,640 Total principal payments $ 185,000 $ 800,000 $ 588,146 $ 1,573,146 (1) The term of the line of credit may be extended pursuant to two six-month extension options, subject to certain conditions. |
Schedule of Derivative Instruments | The following table summarizes the location and fair value of our consolidated derivative instruments on our condensed consolidated balance sheets: Number of Fair Value ($ in thousands) Contracts Notional Amount Other Assets Other Liabilities As of September 30, 2022 Interest rate swaps 12 $ 650,000 $ 20,148 $ — Interest rate caps 2 207,600 4,341 — Total derivative instruments 14 $ 857,600 $ 24,489 $ — As of December 31, 2021 Interest rate swaps 13 $ 500,000 $ 164 $ 11,236 Interest rate caps 2 207,600 159 — Total derivative instruments 15 $ 707,600 $ 323 $ 11,236 |
Schedule of Derivative Instruments, Gain (Loss) | The following table presents the effect of our consolidated derivative instruments on our condensed consolidated financial statements: For the Three Months Ended For the Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 Derivative instruments designated as cash flow hedges: Gain (loss) recognized in AOCI $ 17,114 $ (224) $ 27,976 $ 2,519 Amount reclassified from AOCI into interest expense 331 2,537 3,282 7,740 Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded 42,255 17,866 100,439 51,477 Derivative instruments not designated as cash flow hedges: Gain (loss) recognized in other income $ 1,691 $ — $ 4,223 $ (13) |
DST PROGRAM (Tables)
DST PROGRAM (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Delaware Statutory Trust Program [Abstract] | |
Schedule Of DST Program activity | The following table presents our DST Program activity for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended For the Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 DST Interests sold $ 212,118 $ 73,049 $ 654,781 $ 187,972 DST Interests financed by DST Program Loans 17,286 5,349 45,318 17,105 Income earned from DST Program Loans (1) 942 577 2,443 1,586 Financing obligation liability appreciation (2) 12,189 1,670 24,721 4,181 Rent obligation incurred under master lease agreements (2) 12,708 7,361 33,565 20,697 (1) Included in other income and expenses on condensed consolidated statements of operations. (2) Included in interest expense on condensed consolidated statements of operations. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis | The following table presents our financial instruments measured at fair value on a recurring basis: Total (in thousands) Level 1 Level 2 Level 3 Fair Value As of September 30, 2022 Assets: Derivative instruments $ — $ 24,489 $ — $ 24,489 Total assets measured at fair value $ — $ 24,489 $ — $ 24,489 Liabilities: Derivative instruments $ — $ — $ — $ — Total liabilities measured at fair value $ — $ — $ — $ — As of December 31, 2021 Assets: Derivative instruments $ — $ 323 $ — $ 323 Total assets measured at fair value $ — $ 323 $ — $ 323 Liabilities: Derivative instruments $ — $ 11,236 $ — $ 11,236 Total liabilities measured at fair value $ — $ 11,236 $ — $ 11,236 |
Schedule of Financial Instruments Measured at Fair Value on a Nonrecurring Basis | As of September 30, 2022 As of December 31, 2021 Carrying Fair Carrying Fair (in thousands) Value (1) Value Value (1) Value Assets: Debt-related investments $ 152,927 $ 152,463 $ 106,463 $ 106,463 DST Program Loans 88,597 84,596 62,123 62,123 Liabilities: Line of credit $ 185,000 $ 185,000 $ 256,000 $ 256,000 Term loans 800,000 800,000 525,000 525,000 Mortgage notes 588,146 538,881 589,554 600,467 (1) The carrying value reflects the principal amount outstanding. |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Summary of Changes for Each Class of Common Stock | The following table describes the changes in each class of common shares during the periods presented below: Class T Class S Class D Class I Class E Total (in thousands) Shares Shares Shares Shares Shares Shares FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 Balance as of June 30, 2021 11,692 28,958 5,509 47,745 58,117 152,021 Issuance of common stock: Primary shares 2,202 3,245 568 3,483 — 9,498 Distribution reinvestment plan 69 162 32 282 225 770 Share-based compensation — — — 21 — 21 Redemptions of common stock (64) (217) (119) (442) (1,083) (1,925) Conversions (217) — — 217 — — Balance as of September 30, 2021 13,682 32,148 5,990 51,306 57,259 160,385 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022 Balance as of June 30, 2022 21,672 46,163 7,947 64,741 54,578 195,101 Issuance of common stock: Primary shares 2,994 2,303 135 3,483 — 8,915 Distribution reinvestment plan 109 211 39 321 181 861 Share-based compensation — — — 27 — 27 Redemptions of common stock (49) (531) (188) (417) (1,102) (2,287) Conversions (14) — — 14 — — Balance as of September 30, 2022 24,712 48,146 7,933 68,169 53,657 202,617 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 Balance as of December 31, 2020 9,831 23,516 4,098 44,723 60,873 143,041 Issuance of common stock: Primary shares 4,118 8,873 2,024 6,664 — 21,679 Distribution reinvestment plan 188 444 86 824 695 2,237 Share-based compensation — — — 29 — 29 Redemptions of common stock (163) (685) (218) (1,226) (4,309) (6,601) Conversions (292) — — 292 — — Balance as of September 30, 2021 13,682 32,148 5,990 51,306 57,259 160,385 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 Balance as of December 31, 2021 16,425 35,757 6,749 54,406 56,328 169,665 Issuance of common stock: Primary shares 8,183 12,627 1,628 13,666 — 36,104 Distribution reinvestment plan 301 604 114 928 569 2,516 Share-based compensation — — — 27 — 27 Redemptions of common stock (82) (842) (558) (973) (3,240) (5,695) Conversions (115) — — 115 — — Balance as of September 30, 2022 24,712 48,146 7,933 68,169 53,657 202,617 |
Summary of Distribution Activity | The following table summarizes our distribution activity (including distributions to noncontrolling interests and distributions reinvested in shares of our common stock) for the periods below: Amount Common Stock Declared per Distributions Other Cash Reinvested in Distribution Gross (in thousands, except per share data) Common Share (1) Paid in Cash Distributions (2) Shares Fees (3) Distributions (4) 2022 March 31 $ 0.09375 $ 8,837 $ 3,018 $ 6,876 $ 1,030 $ 19,761 June 30 0.09375 9,299 3,157 7,362 1,259 21,077 September 30 0.09375 9,684 3,972 7,732 1,399 22,787 Total $ 0.28125 $ 27,820 $ 10,147 $ 21,970 $ 3,688 $ 63,625 2021 March 31 $ 0.09375 $ 7,562 $ 1,424 $ 5,526 $ 586 $ 15,098 June 30 0.09375 7,696 1,611 5,723 655 15,685 September 30 0.09375 7,984 1,854 5,985 759 16,582 December 31 0.09375 8,265 2,446 6,361 885 17,957 Total $ 0.37500 $ 31,507 $ 7,335 $ 23,595 $ 2,885 $ 65,322 (1) Amount reflects the total gross quarterly distribution rate authorized by our board of directors per Class T share, per Class S share, per Class D share, per Class I share, and per Class E share of common stock. Distributions were declared and paid as of monthly record dates. These monthly distributions have been aggregated and presented on a quarterly basis. The distributions on Class T shares, Class S shares and Class D shares of common stock are reduced by the respective distribution fees that are payable with respect to Class T shares, Class S shares and Class D shares. (2) Consists of distribution fees paid to Ares Wealth Management Solutions, LLC (the “Dealer Manager”) with respect to OP Units and distributions paid to holders of OP Units and other noncontrolling interest holders. (3) Distribution fees are paid monthly to the Dealer Manager, with respect to Class T shares, Class S shares and Class D shares issued in the primary portion of our public offerings only. All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (4) Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares, Class S shares and Class D shares issued in the primary portion of our public offerings. |
Redemptions and Repurchases Activity | Below is a summary of redemptions and repurchases pursuant to our share redemption program for the nine months ended September 30, 2022 and 2021. Our board of directors may modify or suspend our current share redemption programs if it deems such action to be in the best interest of our stockholders. For the Nine Months Ended September 30, (in thousands, except for per share data) 2022 2021 Number of shares redeemed or repurchased 5,695 6,601 Aggregate dollar amount of shares redeemed or repurchased $ 48,783 $ 50,130 Average redemption or repurchase price per share $ 8.57 $ 7.59 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Redeemable Noncontrolling Interest [Abstract] | |
Schedule of redeemable noncontrolling interest activity | The following table summarizes the redeemable noncontrolling interests activity for the nine months ended September 30, 2022 and 2021: For the Nine Months Ended September 30, ($ in thousands) 2022 2021 Balance at beginning of the year $ 8,994 $ 3,798 Settlement of prior year performance participation allocation (1) 15,327 4,608 Distributions to redeemable noncontrolling interests (543) (314) Redemptions to redeemable noncontrolling interests (2) (7,724) — Net (loss) income attributable to redeemable noncontrolling interests (67) 169 Change from cash flow hedging activities attributable to redeemable noncontrolling interests 283 70 Redemption value allocation adjustment to redeemable noncontrolling interests 1,900 293 Ending balance $ 18,170 $ 8,624 (1) The 2021 performance participation allocation in the amount of $15.3 million became payable on December 31, 2021, and was issued as 1.9 million Class I OP Units in January 2022. At the direction of the Advisor and in light of our Former Sponsor having been the holder of a separate series of partnership interests in the Operating Partnership with special distribution rights (the “Special Units”) for the first six months of 2021, the holder of the Special Units designated 465,000 of these Class I OP Units to an entity owned indirectly by our Chairman, Mr. Mulvihill, and 465,000 of these Class I OP Units to an entity owned indirectly by a member of our Former Sponsor. The holder of the Special Units transferred 945,000 Class I OP Units to the Advisor thereafter. The 2020 performance participation allocation in the amount of $4.6 million became payable to the Former Sponsor, as the former holder of the Special Units, on December 31, 2020. At the Former Advisor’s election, it was paid in the form of Class I OP Units valued at $4.6 million (based on the NAV per unit as of December 31, 2020), which were issued to the Former Sponsor in January 2021 and subsequently transferred to its members or their affiliates. (2) At the request of the Advisor, the Operating Partnership redeemed all Class I OP Units issued to the Advisor in January 2022 for $7.7 million. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule Fees and Expenses to the Advisor and Its Affiliates | The table below summarizes the fees and expenses incurred by us for services provided by the Advisor and its affiliates, and by the Dealer Manager related to the services the Dealer Manager provided in connection with our public offerings and any related amounts payable: For the Three Months Ended September 30, For the Nine Months Ended September 30, Payable as of (in thousands) 2022 2021 2022 2021 September 30, 2022 December 31, 2021 Selling commissions and dealer manager fees (1) $ 1,614 $ 845 $ 4,480 $ 1,866 $ — $ — Ongoing distribution fees (1)(2) 1,416 788 3,745 2,064 638 394 Advisory fees—fixed component 8,980 5,480 24,351 15,389 3,058 2,094 Performance participation allocation 3,710 3,774 22,088 7,769 22,088 15,327 Other expense reimbursements—Advisor (3)(4) 2,962 2,950 8,308 8,783 2,597 1,443 Other expense reimbursements—Dealer Manager 99 107 269 249 84 — Property accounting fee (5) 508 — 811 — 811 — DST Program selling commissions, dealer manager and distribution fees (1) 5,994 3,106 19,178 6,422 264 219 Other DST Program related costs—Advisor (4) 4,217 1,710 12,617 3,978 150 87 Total $ 29,500 $ 18,760 $ 95,847 $ 46,520 $ 29,690 $ 19,564 (1) All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (2) The distribution fees are payable monthly in arrears. Additionally, we accrue for future estimated amounts payable related to ongoing distribution fees. The future estimated amounts payable of approximately $55.4 million and $34.1 million as of September 30, 2022 and December 31, 2021, respectively, are included in other liabilities on the consolidated balance sheets. (3) Other expense reimbursements include certain expenses incurred for organization and offering, acquisition and general administrative services provided to us under the advisory agreement, including, but not limited to, certain expenses described after this footnote, allocated rent paid to both third parties and affiliates of our Advisor, equipment, utilities, insurance, travel and entertainment. (4) Includes costs reimbursed to the Advisor related to the DST Program. (5) The cost of the property management fee, including the property accounting fee, is generally borne by the tenant or tenants at each real property, either via a direct reimbursement to us or, in the case of tenants subject to a gross lease, as part of the lease cost. In certain circumstances, we may pay for a portion of the property management fee, including the property accounting fee, without reimbursement from the tenant or tenants at a real property. |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Details of Numerator and Denominator Used to Calculate Basic and Diluted Net Income (Loss) Per Common Share | The computation of our basic and diluted net income (loss) per share attributable to common stockholders is as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands, except per share data) 2022 2021 2022 2021 Net (loss) income attributable to common stockholders—basic $ (24,872) $ 13,940 $ (9,449) $ 22,922 Net (loss) income attributable to redeemable noncontrolling interests (253) 99 (67) 169 Net (loss) income attributable to noncontrolling interests (4,996) 1,654 (2,378) 2,430 Net (loss) income attributable to common stockholders—diluted $ (30,121) $ 15,693 $ (11,894) $ 25,521 Weighted-average shares outstanding—basic 200,667 157,025 190,199 151,045 Incremental weighted-average shares effect of conversion of noncontrolling interests 42,327 19,752 36,095 17,430 Weighted-average shares outstanding—diluted 242,994 176,777 226,294 168,475 Net (loss) income per share attributable to common stockholders: Basic $ (0.12) $ 0.09 $ (0.05) $ 0.15 Diluted $ (0.12) $ 0.09 $ (0.05) $ 0.15 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Supplemental Cash Flow Information and Disclosure Non-Cash Investing and Financing Activities | Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows: For the Nine Months Ended September 30, (in thousands) 2022 2021 Distributions reinvested in common stock $ 21,555 $ 17,001 Change in accrued future ongoing distribution fees 21,371 10,864 Net increase in DST Program Loans receivable through DST Program capital raising 45,318 17,105 Settlement of DST Program Loans through issuance of OP Units 18,695 4,058 Redeemable noncontrolling interest issued as settlement of performance participation allocation 15,327 4,608 Issuances of OP Units for DST Interests 136,905 57,729 |
Summary of Cash, Cash Equivalents and Restricted Cash | Restricted cash consists of lender and property-related escrow accounts. The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows: For the Nine Months Ended September 30, (in thousands) 2022 2021 Beginning of period: Cash and cash equivalents $ 10,605 $ 11,266 Restricted cash 3,747 10,468 Cash, cash equivalents and restricted cash $ 14,352 $ 21,734 End of period: Cash and cash equivalents $ 24,245 $ 12,463 Restricted cash 3,788 10,533 Cash, cash equivalents and restricted cash $ 28,033 $ 22,996 |
SEGMENT FINANCIAL INFORMATION (
SEGMENT FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Summary of Total Assets by Business Segment | The following table reflects our total consolidated assets by business segment as of September 30, 2022 and December 31, 2021: As of (in thousands) September 30, 2022 December 31, 2021 (1) Assets: Office properties $ 367,711 $ 335,811 Retail properties 541,881 639,584 Residential properties 1,504,078 837,491 Industrial properties 1,265,691 826,353 Corporate 394,316 351,732 Total assets $ 4,073,677 $ 2,990,971 (1) As of December 31, 2021, amounts held for sale are included in the corporate grouping. Refer to “Note 3” for further detail. |
Revenue and Components of Net Operating Income | The following table sets forth consolidated financial results by segment for the three and nine months ended September 30, 2022 and 2021: (in thousands) Office Retail Residential Industrial Consolidated For the Three Months Ended September 30, 2022 Rental revenues $ 13,065 $ 15,303 $ 28,047 $ 20,573 $ 76,988 Rental expenses (6,296) (4,421) (12,261) (5,117) (28,095) Net operating income $ 6,769 $ 10,882 $ 15,786 $ 15,456 $ 48,893 Real estate-related depreciation and amortization $ 3,746 $ 4,140 $ 13,490 $ 15,337 $ 36,713 For the Three Months Ended September 30, 2021 Rental revenues $ 16,887 $ 18,679 $ 7,237 $ 10,793 $ 53,596 Rental expenses (7,111) (4,660) (3,257) (2,814) (17,842) Net operating income $ 9,776 $ 14,019 $ 3,980 $ 7,979 $ 35,754 Real estate-related depreciation and amortization $ 4,945 $ 5,336 $ 2,283 $ 6,257 $ 18,821 For the Nine Months Ended September 30, 2022 Rental revenues $ 39,845 $ 48,879 $ 70,225 $ 54,038 $ 212,987 Rental expenses (18,259) (12,826) (30,265) (12,955) (74,305) Net operating income $ 21,586 $ 36,053 $ 39,960 $ 41,083 $ 138,682 Real estate-related depreciation and amortization $ 11,986 $ 13,268 $ 37,882 $ 37,931 $ 101,067 For the Nine Months Ended September 30, 2021 Rental revenues $ 49,663 $ 53,600 $ 20,885 $ 28,509 $ 152,657 Rental expenses (22,116) (13,854) (9,666) (6,682) (52,318) Net operating income $ 27,547 $ 39,746 $ 11,219 $ 21,827 $ 100,339 Real estate-related depreciation and amortization $ 14,814 $ 14,445 $ 7,612 $ 15,857 $ 52,728 |
Reconciliation of Net Operating Income to Reported Net Income (Loss) | The following table is a reconciliation of our reported net income (loss) attributable to common stockholders to our net operating income for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended For the Nine Months Ended September 30, September 30, (in thousands) 2022 2021 2022 2021 Net (loss) income attributable to common stockholders $ (24,872) $ 13,940 $ (9,449) $ 22,922 Debt-related income (1,548) (2,298) (5,862) (6,741) Real estate-related depreciation and amortization 36,713 18,821 101,067 52,728 General and administrative expenses 3,155 2,183 7,786 6,582 Advisory fees 8,980 5,480 24,351 15,389 Performance participation allocation 3,710 3,774 22,088 7,769 Acquisition costs and reimbursements 1,176 738 3,898 1,451 Impairment of real estate property — — — 758 Equity in income from unconsolidated joint venture partnerships (1,590) — (2,298) — Interest expense 42,255 17,866 100,439 51,477 Gain on sale of real estate property (11,303) (25,979) (94,827) (53,321) Loss on extinguishment of debt and financing commitments, net — — 8 — Other income (2,534) (524) (6,074) (1,274) Net (loss) income attributable to redeemable noncontrolling interests (253) 99 (67) 169 Net (loss) income attributable to noncontrolling interests (4,996) 1,654 (2,378) 2,430 Net operating income $ 48,893 $ 35,754 $ 138,682 $ 100,339 |
INVESTMENTS IN REAL ESTATE PR_3
INVESTMENTS IN REAL ESTATE PROPERTIES (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) property | Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) property | |
Real Estate Properties [Line Items] | ||||
Weighted-average amortization period of acquired finite-lived intangible assets | 5 years 2 months 12 days | |||
Proceeds from disposition of real estate property | $ | $ 274,816 | $ 141,360 | ||
Gain on sale of real estate property | $ | $ 11,303 | $ 25,979 | 94,827 | 53,321 |
Impairment of real estate property | $ | $ 0 | $ 0 | $ 0 | $ 758 |
Disposed of by Sale | Office properties | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | property | 1 | 2 | 1 | 2 |
Disposed of by Sale | Retail properties | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | property | 6 | 1 | 6 | 1 |
Disposed of by Sale | Retail properties | Retail Property, Greater Boston Market | ||||
Real Estate Properties [Line Items] | ||||
Impairment of real estate property | $ | $ 800 | |||
Disposed of by Sale | Retail land parcel | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | property | 1 | 1 | ||
Disposed of by Sale | Industrial properties | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | property | 1 | 1 |
INVESTMENTS IN REAL ESTATE PR_4
INVESTMENTS IN REAL ESTATE PROPERTIES (Schedule of Consolidated Investments in Real Estate Properties) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Abstract] | ||
Land | $ 693,409 | $ 583,728 |
Buildings and improvements | 3,136,259 | 2,180,358 |
Intangible lease assets | 315,429 | 284,128 |
Right of use asset | $ 13,637 | $ 13,637 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Net investment in real estate properties | Net investment in real estate properties |
Investment in real estate properties | $ 4,158,734 | $ 3,061,851 |
Accumulated depreciation and amortization | (539,015) | (472,025) |
Net investment in real estate properties | $ 3,619,719 | $ 2,589,826 |
INVESTMENTS IN REAL ESTATE PR_5
INVESTMENTS IN REAL ESTATE PROPERTIES (Schedule of Asset Acquisitions) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Asset Acquisition [Line Items] | |
Percentage of assets acquired | 100% |
Real Estate Acquired | |
Asset Acquisition [Line Items] | |
Total acquisitions | $ 1,188,033 |
Debt assumed at fair value | 0 |
Skye 750 | |
Asset Acquisition [Line Items] | |
Total acquisitions | 92,845 |
Arabelle City Center | |
Asset Acquisition [Line Items] | |
Total acquisitions | 156,781 |
Dallas Cityline | |
Asset Acquisition [Line Items] | |
Total acquisitions | 111,093 |
Dallas Wycliff | |
Asset Acquisition [Line Items] | |
Total acquisitions | 94,083 |
Dallas Maple District | |
Asset Acquisition [Line Items] | |
Total acquisitions | 93,089 |
San Vance | |
Asset Acquisition [Line Items] | |
Total acquisitions | 77,586 |
San Stone Oak | |
Asset Acquisition [Line Items] | |
Total acquisitions | 72,605 |
General Washington IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 11,051 |
Western Foods Center | |
Asset Acquisition [Line Items] | |
Total acquisitions | 39,298 |
Orlando I & II LC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 94,759 |
Orlando III & IV LC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 42,347 |
Orlando V LC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 34,828 |
Orlando VI LC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 28,694 |
Orlando VII LC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 23,532 |
1403 Gillingham Lane | |
Asset Acquisition [Line Items] | |
Total acquisitions | 20,550 |
Industrial Drive IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 4,018 |
Glen Afton IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 22,036 |
East 56th Ave IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 19,041 |
Brockton IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 6,522 |
Pine Vista IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 18,790 |
Tri-County Parkway IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 12,784 |
Miami NW 114th IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 12,022 |
North Harney IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 8,026 |
Wes Warren Drive IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 7,515 |
Enterprise Way IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 6,519 |
New Albany IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 17,544 |
Maplewood Drive IC | |
Asset Acquisition [Line Items] | |
Total acquisitions | 5,514 |
1801 N. 5th Street | |
Asset Acquisition [Line Items] | |
Total acquisitions | 23,305 |
350 Carter Road | |
Asset Acquisition [Line Items] | |
Total acquisitions | $ 31,256 |
INVESTMENTS IN REAL ESTATE PR_6
INVESTMENTS IN REAL ESTATE PROPERTIES (Purchase Price Allocation) (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Real Estate [Line Items] | |
Land | $ 152,767 |
Building | 999,305 |
Intangible lease assets | 41,439 |
Above-market lease assets | 696 |
Below-market lease liabilities | (6,174) |
Total purchase price | 1,188,033 |
Real Estate Acquired | |
Real Estate [Line Items] | |
Debt assumed at fair value | $ 0 |
INVESTMENTS IN REAL ESTATE PR_7
INVESTMENTS IN REAL ESTATE PROPERTIES (Intangible Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Assets | $ 315,429 | $ 284,128 |
Gross, Liabilities | (76,033) | (80,206) |
Accumulated Amortization, Liabilities | 32,381 | 32,707 |
Net, Liabilities | (43,652) | (47,499) |
Intangible lease assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Assets | 292,530 | 261,401 |
Accumulated Amortization, Assets | (207,172) | (186,820) |
Net, Assets | 85,358 | 74,581 |
Above-market lease assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Assets | 22,899 | 22,727 |
Accumulated Amortization, Assets | (19,521) | (19,507) |
Net, Assets | $ 3,378 | $ 3,220 |
INVESTMENTS IN REAL ESTATE PR_8
INVESTMENTS IN REAL ESTATE PROPERTIES (Schedule of Adjustments to Rental Revenue Related to Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Real Estate [Abstract] | ||||
Straight-line rent adjustments | $ 898 | $ 2,798 | $ 2,864 | $ 4,667 |
Above-market lease amortization | (185) | (138) | (538) | (327) |
Below-market lease amortization | 1,209 | 922 | 3,615 | 2,419 |
Depreciation expense | 26,118 | 15,332 | 71,665 | 42,740 |
Intangible lease asset amortization | $ 10,595 | $ 3,489 | $ 29,402 | $ 9,988 |
ASSETS HELD FOR SALE (Details)
ASSETS HELD FOR SALE (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) property |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net investment in real estate properties | $ 101,690 | |
Other assets | 3,406 | |
Assets held for sale | $ 0 | 105,096 |
Accounts payable and accrued expenses | 3,172 | |
Intangible lease liabilities, net | 995 | |
Other liabilities | 1,577 | |
Liabilities related to assets held for sale | $ 0 | $ 5,744 |
Assets Held for Sale. | Bandera Road | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | property | 1 | |
Assets Held for Sale. | 1st Avenue Plaza | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | property | 1 |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS (Details) $ in Thousands | Dec. 21, 2021 property | Nov. 30, 2021 item | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||
Joint venture partnerships | item | 2 | |||
Investment in unconsolidated joint venture partnerships | $ 106,343 | $ 57,425 | ||
Vue 1400 JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 85% | |||
Investment in unconsolidated joint venture partnerships | $ 26,038 | 26,117 | ||
Vue 1400 JV | Vue 1400 JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number Of Units | property | 316 | |||
Net Lease JV I | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 50% | |||
Investment in unconsolidated joint venture partnerships | $ 16,393 | 16,267 | ||
Net Lease JV II | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 50% | |||
Investment in unconsolidated joint venture partnerships | $ 63,912 | $ 15,041 |
DEBT (Schedule of Debt) (Detail
DEBT (Schedule of Debt) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Weighted-Average Effective Interest Rate as of | 3.98% | 2.78% |
Total borrowings | $ 1,573,146 | $ 1,370,554 |
Less: unamortized debt issuance costs | (15,588) | (16,762) |
Add: unamortized mark-to-market adjustment on assumed debt | 8,667 | 9,442 |
Total debt, net | 1,566,225 | 1,363,234 |
Gross book value of properties encumbered by debt | $ 969,752 | $ 981,927 |
Weighted Average | ||
Debt Instrument [Line Items] | ||
Remaining debt term (in years) | 4 years 2 months 12 days | |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Weighted-Average Effective Interest Rate as of | 4.41% | 1.35% |
Total borrowings | $ 185,000 | $ 256,000 |
Current borrowing capacity | 715,000 | |
Available portions under the line of credit | $ 573,300 | |
Line of Credit | SOFR | ||
Debt Instrument [Line Items] | ||
Borrowings spread rate adjustment | 11.448% | 11.448% |
Line of Credit | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 1.25% | 1.25% |
Line of Credit | SOFR | Maximum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 2% | 2% |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 800,000 | |
Term Loan (Maturity Date November 2026) | ||
Debt Instrument [Line Items] | ||
Weighted-Average Effective Interest Rate as of | 3.57% | 3.16% |
Total borrowings | $ 400,000 | $ 325,000 |
Maximum borrowing capacity | $ 400,000 | |
Term Loan (Maturity Date November 2026) | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 1.20% | 1.20% |
Term Loan (Maturity Date November 2026) | SOFR | Maximum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 1.90% | 1.90% |
Term Loan (Maturity Date November 2026) | Interest rate swaps | ||
Debt Instrument [Line Items] | ||
Amount of hedged item | $ 300,000 | |
Term Loan (Maturity Date January 2027) | ||
Debt Instrument [Line Items] | ||
Weighted-Average Effective Interest Rate as of | 4.39% | 3.19% |
Total borrowings | $ 400,000 | $ 200,000 |
Maximum borrowing capacity | $ 400,000 | |
Term Loan (Maturity Date January 2027) | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 1.20% | 1.20% |
Term Loan (Maturity Date January 2027) | SOFR | Maximum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 1.90% | 1.90% |
Term Loan (Maturity Date January 2027) | Interest rate swaps | ||
Debt Instrument [Line Items] | ||
Amount of hedged item | $ 350,000 | |
Fixed-Rate Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Weighted-Average Effective Interest Rate as of | 3.48% | 3.49% |
Total borrowings | $ 380,546 | $ 381,954 |
Floating-Rate Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Weighted-Average Effective Interest Rate as of | 4.52% | 2.26% |
Total borrowings | $ 207,600 | $ 207,600 |
Floating-Rate Mortgage Notes | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 1.55% | 1.55% |
Floating-Rate Mortgage Notes | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings spread rate | 2.50% | 2.50% |
Floating-Rate Mortgage Notes | Interest rate caps | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Floating rate | 4.50% | |
Floating-Rate Mortgage Notes | Interest rate caps | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Floating rate | 4.55% |
DEBT (Summary of Borrowings Ref
DEBT (Summary of Borrowings Reflects Contractual Debt Maturities) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||
Remainder of 2022 | $ 204 | |
2023 | 1,463 | |
2024 | 129,265 | |
2025 | 257,360 | |
2026 | 484,214 | |
Thereafter | 700,640 | |
Total principal payments | 1,573,146 | $ 1,370,554 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 185,000 | |
2026 | 0 | |
Thereafter | 0 | |
Total principal payments | $ 185,000 | $ 256,000 |
Term of extension | 6 months | |
Number of extension options | item | 2 | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | $ 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 400,000 | |
Thereafter | 400,000 | |
Total principal payments | 800,000 | |
Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | 204 | |
2023 | 1,463 | |
2024 | 129,265 | |
2025 | 72,360 | |
2026 | 84,214 | |
Thereafter | 300,640 | |
Total principal payments | $ 588,146 |
DEBT (Summary of Location and F
DEBT (Summary of Location and Fair Value of Derivative Instruments) (Details) $ in Thousands | Sep. 30, 2022 USD ($) contract | Dec. 31, 2021 USD ($) contract |
Derivatives, Fair Value [Line Items] | ||
Number of derivative contracts | contract | 14 | 15 |
Total notional amount | $ 857,600 | $ 707,600 |
Derivative assets | $ 24,489 | $ 323 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
Derivative liabilities | $ 0 | $ 11,236 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Number of derivative contracts | contract | 12 | 13 |
Total notional amount | $ 650,000 | $ 500,000 |
Derivative assets | $ 20,148 | $ 164 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
Derivative liabilities | $ 0 | $ 11,236 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Estimated change to interest expense related to active effective hedges of floating rate debt | $ 10,200 | |
Interest rate caps | ||
Derivatives, Fair Value [Line Items] | ||
Number of derivative contracts | contract | 2 | 2 |
Total notional amount | $ 207,600 | $ 207,600 |
Derivative assets | $ 4,341 | $ 159 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
Derivative liabilities | $ 0 | $ 0 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
DEBT (Effect of Derivative Fina
DEBT (Effect of Derivative Financial Instruments on Financial Statements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded | $ 42,255 | $ 17,866 | $ 100,439 | $ 51,477 |
Designated Hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded | 42,255 | $ 17,866 | 100,439 | 51,477 |
Not Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in other income | $ 1,691 | $ 4,223 | $ (13) | |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Cash Flow Hedging | Designated Hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in AOCI | $ 17,114 | $ (224) | $ 27,976 | $ 2,519 |
Amount reclassified from AOCI into interest expense | $ 331 | $ 2,537 | $ 3,282 | $ 7,740 |
DST PROGRAM (Details)
DST PROGRAM (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||||
DST Program Loans | $ 88,597 | $ 88,597 | $ 62,123 | ||
Financing obligation liability appreciation | 24,721 | $ 4,181 | |||
Rent obligation incurred under master lease agreements | 28,095 | $ 17,842 | 74,305 | 52,318 | |
Issuances of OP Units for DST Interests | 97,464 | 31,788 | 136,905 | 57,729 | |
DST Program | |||||
Variable Interest Entity [Line Items] | |||||
DST Program Loans | 88,600 | 88,600 | $ 62,100 | ||
DST Interests sold | 212,118 | 73,049 | 654,781 | 187,972 | |
DST Interests financed by DST Program Loans | 17,286 | 5,349 | 45,318 | 17,105 | |
Income earned from DST Program Loans | 942 | 577 | 2,443 | 1,586 | |
Financing obligation liability appreciation | 12,189 | 1,670 | 24,721 | 4,181 | |
Rent obligation incurred under master lease agreements | $ 12,708 | $ 7,361 | 33,565 | 20,697 | |
Issuances of OP Units for DST Interests | $ 136,900 | $ 57,700 | |||
DST Program | OP Units | |||||
Variable Interest Entity [Line Items] | |||||
Issuance of OP Units (in shares) | 15.8 | 7.6 |
FAIR VALUE (Measured on Recurri
FAIR VALUE (Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Derivative instruments | $ 24,489 | $ 323 |
Liabilities: | ||
Derivative instruments | 0 | 11,236 |
Recurring | ||
Assets: | ||
Derivative instruments | 24,489 | 323 |
Total assets measured at fair value | 24,489 | 323 |
Liabilities: | ||
Derivative instruments | 0 | 11,236 |
Total liabilities measured at fair value | 0 | 11,236 |
Recurring | Level 1 | ||
Assets: | ||
Derivative instruments | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative instruments | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
Derivative instruments | 24,489 | 323 |
Total assets measured at fair value | 24,489 | 323 |
Liabilities: | ||
Derivative instruments | 0 | 11,236 |
Total liabilities measured at fair value | 0 | 11,236 |
Recurring | Level 3 | ||
Assets: | ||
Derivative instruments | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Derivative instruments | 0 | 0 |
Total liabilities measured at fair value | $ 0 | $ 0 |
FAIR VALUE (Measured on Nonrecu
FAIR VALUE (Measured on Nonrecurring Basis) (Details) - Level 3 - Nonrecurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Amount | ||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Debt-related investments | $ 152,927 | $ 106,463 |
DST Program Loans | 88,597 | 62,123 |
Line of credit | 185,000 | 256,000 |
Term loans | 800,000 | 525,000 |
Mortgage notes | 588,146 | 589,554 |
Estimated Fair Value | ||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Debt-related investments | 152,463 | 106,463 |
DST Program Loans | 84,596 | 62,123 |
Line of credit | 185,000 | 256,000 |
Term loans | 800,000 | 525,000 |
Mortgage notes | $ 538,881 | $ 600,467 |
EQUITY (Narrative) (Details)
EQUITY (Narrative) (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 03, 2022 | May 02, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Dollar Value Of Primary Shares Of Common Stock In Offering | $ 10,000,000 | $ 3,000,000 | ||||
Issuance of common stock | $ 87,893 | $ 79,472 | $ 332,419 | $ 183,756 | ||
Issuance of common stock (in shares) | 38.6 | |||||
Primary offering | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Dollar Value Of Primary Shares Of Common Stock In Offering | 8,500,000 | |||||
DRIP Offering | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Dollar Value Of Primary Shares Of Common Stock In Offering | $ 1,500,000 | |||||
Issuance of common stock | $ 21,600 |
EQUITY (Information of Share Tr
EQUITY (Information of Share Transactions) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Redemptions of common stock (in shares) | (5,695) | (6,601) | ||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 195,101 | 152,021 | 169,665 | 143,041 |
Primary shares (in shares) | 8,915 | 9,498 | 36,104 | 21,679 |
Distribution reinvestment plan (in shares) | 861 | 770 | 2,516 | 2,237 |
Share-based compensation (in shares) | 27 | 21 | 27 | 29 |
Redemptions of common stock (in shares) | (2,287) | (1,925) | (5,695) | (6,601) |
Conversions (in shares) | 0 | 0 | 0 | 0 |
Ending Balances (in shares) | 202,617 | 160,385 | 202,617 | 160,385 |
Class T | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 16,425 | |||
Ending Balances (in shares) | 24,712 | 24,712 | ||
Class T | Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 21,672 | 11,692 | 16,425 | 9,831 |
Primary shares (in shares) | 2,994 | 2,202 | 8,183 | 4,118 |
Distribution reinvestment plan (in shares) | 109 | 69 | 301 | 188 |
Share-based compensation (in shares) | 0 | 0 | 0 | 0 |
Redemptions of common stock (in shares) | (49) | (64) | (82) | (163) |
Conversions (in shares) | (14) | (217) | (115) | (292) |
Ending Balances (in shares) | 24,712 | 13,682 | 24,712 | 13,682 |
Class S | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 35,757 | |||
Ending Balances (in shares) | 48,146 | 48,146 | ||
Class S | Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 46,163 | 28,958 | 35,757 | 23,516 |
Primary shares (in shares) | 2,303 | 3,245 | 12,627 | 8,873 |
Distribution reinvestment plan (in shares) | 211 | 162 | 604 | 444 |
Share-based compensation (in shares) | 0 | 0 | 0 | 0 |
Redemptions of common stock (in shares) | (531) | (217) | (842) | (685) |
Conversions (in shares) | 0 | 0 | 0 | 0 |
Ending Balances (in shares) | 48,146 | 32,148 | 48,146 | 32,148 |
Class D | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 6,749 | |||
Ending Balances (in shares) | 7,933 | 7,933 | ||
Class D | Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 7,947 | 5,509 | 6,749 | 4,098 |
Primary shares (in shares) | 135 | 568 | 1,628 | 2,024 |
Distribution reinvestment plan (in shares) | 39 | 32 | 114 | 86 |
Share-based compensation (in shares) | 0 | 0 | 0 | 0 |
Redemptions of common stock (in shares) | (188) | (119) | (558) | (218) |
Conversions (in shares) | 0 | 0 | 0 | 0 |
Ending Balances (in shares) | 7,933 | 5,990 | 7,933 | 5,990 |
Class I | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 54,406 | |||
Ending Balances (in shares) | 68,169 | 68,169 | ||
Class I | Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 64,741 | 47,745 | 54,406 | 44,723 |
Primary shares (in shares) | 3,483 | 3,483 | 13,666 | 6,664 |
Distribution reinvestment plan (in shares) | 321 | 282 | 928 | 824 |
Share-based compensation (in shares) | 27 | 21 | 27 | 29 |
Redemptions of common stock (in shares) | (417) | (442) | (973) | (1,226) |
Conversions (in shares) | 14 | |||
Conversions (in shares) | 217 | 115 | 292 | |
Ending Balances (in shares) | 68,169 | 51,306 | 68,169 | 51,306 |
Class E | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 56,328 | |||
Ending Balances (in shares) | 53,657 | 53,657 | ||
Class E | Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balances (in shares) | 54,578 | 58,117 | 56,328 | 60,873 |
Primary shares (in shares) | 0 | 0 | 0 | 0 |
Distribution reinvestment plan (in shares) | 181 | 225 | 569 | 695 |
Share-based compensation (in shares) | 0 | 0 | 0 | 0 |
Redemptions of common stock (in shares) | (1,102) | (1,083) | (3,240) | (4,309) |
Conversions (in shares) | 0 | 0 | 0 | 0 |
Ending Balances (in shares) | 53,657 | 57,259 | 53,657 | 57,259 |
EQUITY (Total Distributions Dec
EQUITY (Total Distributions Declared and Portion of Each Contribution Paid in Cash and Reinvested) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | |||||||||
Declared per Common Share (usd per share) | $ 0.09375 | $ 0.09375 | $ 0.09375 | $ 0.09375 | $ 0.09375 | $ 0.09375 | $ 0.09375 | $ 0.28125 | $ 0.37500 |
Common Stock Distributions Paid in Cash | $ 9,684 | $ 9,299 | $ 8,837 | $ 8,265 | $ 7,984 | $ 7,696 | $ 7,562 | $ 27,820 | $ 31,507 |
Other Cash Distributions | 3,972 | 3,157 | 3,018 | 2,446 | 1,854 | 1,611 | 1,424 | 10,147 | 7,335 |
Reinvested in Shares | 7,732 | 7,362 | 6,876 | 6,361 | 5,985 | 5,723 | 5,526 | 21,970 | 23,595 |
Distribution Fees | 1,399 | 1,259 | 1,030 | 885 | 759 | 655 | 586 | 3,688 | 2,885 |
Total Distributions | $ 22,787 | $ 21,077 | $ 19,761 | $ 17,957 | $ 16,582 | $ 15,685 | $ 15,098 | $ 63,625 | $ 65,322 |
EQUITY (Redemptions and Repurch
EQUITY (Redemptions and Repurchases Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||||
Number of shares redeemed or repurchased (in shares) | 5,695 | 6,601 | ||
Aggregate dollar amount of shares redeemed | $ 20,283 | $ 14,750 | $ 48,783 | $ 50,130 |
Average redemption or repurchase price per share (usd per share) | $ 8.57 | $ 7.59 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS (Schedule of redeemable noncontrolling interest activity) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Redeemable Noncontrolling Interest [Line Items] | |||||||
Balance at beginning of the year | $ 8,994 | $ 8,994 | $ 3,798 | ||||
Settlement of prior year performance participation allocation | 15,327 | 4,608 | |||||
Distributions to redeemable noncontrolling interests | $ (192) | $ (106) | (543) | (314) | |||
Redemptions to redeemable noncontrolling interests | (7,724) | 0 | |||||
Net (loss) income attributable to redeemable noncontrolling interests | (253) | 99 | (67) | 169 | |||
Change from cash flow hedging activities attributable to redeemable noncontrolling interests | 147 | 15 | 283 | 70 | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | 1,900 | 293 | |||||
Ending balance | 18,170 | $ 8,624 | 18,170 | $ 8,624 | $ 3,798 | ||
Payable as of | 29,690 | 29,690 | $ 19,564 | ||||
Performance Participation Allocation | OP Units | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Issuance of OP Units (in shares) | 1,900,000 | ||||||
Black Creek Diversified Property Advisors, LLC | Performance Participation Allocation | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Settlement of prior year performance participation allocation | 4,600 | ||||||
Payable as of | 15,300 | ||||||
Black Creek Diversified Property Advisors, LLC | Performance Participation Allocation | OP Units | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Issuance of OP Units (in shares) | 465,000 | ||||||
Advisor | Advisory Fee, Performance Component | OP Units | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Settlement of prior year performance participation allocation | $ 4,600 | ||||||
Redemptions to redeemable noncontrolling interests | $ 7,700 | ||||||
Issuance of OP Units (in shares) | 945,000 | ||||||
Advisor | Performance Participation Allocation | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Payable as of | $ 22,088 | $ 22,088 | $ 15,327 | ||||
Chairman | Performance Participation Allocation | OP Units | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Issuance of OP Units (in shares) | 465,000 |
RELATED PARTY TRANSACTIONS - (S
RELATED PARTY TRANSACTIONS - (Summary of Fees and Other Amounts Earned by Advisor and Its Related Parties) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Related party transaction expense | $ 29,500 | $ 18,760 | $ 95,847 | $ 46,520 | |
Payable as of | 29,690 | 29,690 | $ 19,564 | ||
Black Creek Diversified Property Advisors, LLC | Performance Participation Allocation | |||||
Related Party Transaction [Line Items] | |||||
Payable as of | 15,300 | ||||
Advisor | |||||
Related Party Transaction [Line Items] | |||||
Amount reimbursed for services | 2,600 | 2,600 | 7,900 | 7,300 | |
Advisor | Selling commissions and dealer manager fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 1,614 | 845 | 4,480 | 1,866 | |
Advisor | Advisory fee, fixed component | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 8,980 | 5,480 | 24,351 | 15,389 | |
Payable as of | 3,058 | 3,058 | 2,094 | ||
Advisor | Performance Participation Allocation | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 3,710 | 3,774 | 22,088 | 7,769 | |
Payable as of | 22,088 | 22,088 | 15,327 | ||
Advisor | Other Expense Reimbursements [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 2,962 | 2,950 | 8,308 | 8,783 | |
Payable as of | 2,597 | 2,597 | 1,443 | ||
Advisor | DST Program dealer manager fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 4,217 | 1,710 | 12,617 | 3,978 | |
Payable as of | 150 | 150 | 87 | ||
Dealer Manager | Ongoing distribution fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 1,416 | 788 | 3,745 | 2,064 | |
Payable as of | 638 | 638 | 394 | ||
Dealer Manager | Ongoing distribution fees | Other Liabilities | |||||
Related Party Transaction [Line Items] | |||||
Future estimated amounts payable | 55,400 | 55,400 | 34,100 | ||
Dealer Manager | Other Expense Reimbursements [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 99 | 107 | 269 | 249 | |
Payable as of | 84 | 84 | |||
Dealer Manager | Property accounting fee | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 508 | 811 | |||
Payable as of | 811 | 811 | |||
Dealer Manager | DST Program dealer manager fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 5,994 | $ 3,106 | 19,178 | $ 6,422 | |
Payable as of | $ 264 | $ 264 | $ 219 |
RELATED PARTY TRANSACTIONS - (P
RELATED PARTY TRANSACTIONS - (Performance Participation Allocation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Related party transaction expense | $ 29,500 | $ 18,760 | $ 95,847 | $ 46,520 |
Advisor | Performance Participation Allocation | ||||
Related Party Transaction [Line Items] | ||||
Threshold for performance component of advisory fee | 12.50% | 12.50% | ||
Threshold of annual total return as % of NAV | 5% | |||
Performance component earned for excess return over the hurdle amount | 100% | |||
Maximum performance component limited to % of total annual return | 12.50% | |||
Related party transaction expense | $ 3,710 | $ 3,774 | $ 22,088 | $ 7,769 |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income attributable to common stockholders-basic | $ (24,872) | $ 13,940 | $ (9,449) | $ 22,922 |
Net (loss) income attributable to redeemable noncontrolling interests | (253) | 99 | (67) | 169 |
Net (loss) income attributable to noncontrolling interests | (4,996) | 1,654 | (2,378) | 2,430 |
Net (loss) income attributable to common stockholders-diluted | $ (30,121) | $ 15,693 | $ (11,894) | $ 25,521 |
Weighted-average shares outstanding-basic (in shares) | 200,667 | 157,025 | 190,199 | 151,045 |
Incremental weighted-average shares effect of conversion of noncontrolling interests | 42,327 | 19,752 | 36,095 | 17,430 |
Weighted-average shares outstanding - diluted (in shares) | 242,994 | 176,777 | 226,294 | 168,475 |
Basic | $ (0.12) | $ 0.09 | $ (0.05) | $ 0.15 |
Diluted | $ (0.12) | $ 0.09 | $ (0.05) | $ 0.15 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Noncash Investing and Financing Items [Abstract] | ||||
Distributions reinvested in common stock | $ 21,555 | $ 17,001 | ||
Change in accrued future ongoing distribution fees | 21,371 | 10,864 | ||
Net increase in DST Program Loans receivable through DST Program capital raising | 45,318 | 17,105 | ||
Settlement of DST Program Loans through issuance of OP Units | 18,695 | 4,058 | ||
Redeemable noncontrolling interest issued as settlement of performance participation allocation | 15,327 | 4,608 | ||
Issuances of OP Units for DST Interests | 136,905 | 57,729 | ||
Supplemental Cash Flow Information [Abstract] | ||||
Cash and cash equivalents | 24,245 | 12,463 | $ 10,605 | $ 11,266 |
Restricted cash | 3,788 | 10,533 | 3,747 | 10,468 |
Cash, cash equivalents and restricted cash | $ 28,033 | $ 22,996 | $ 14,352 | $ 21,734 |
SEGMENT FINANCIAL INFORMATION_2
SEGMENT FINANCIAL INFORMATION (Schedule of Total Assets by Business Segment) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Number of reportable segments | segment | 4 | |
Total Assets | $ 4,073,677 | $ 2,990,971 |
Operating Segments | Office | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total Assets | 367,711 | 335,811 |
Operating Segments | Retail | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total Assets | 541,881 | 639,584 |
Operating Segments | Residential | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total Assets | 1,504,078 | 837,491 |
Operating Segments | Industrial | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total Assets | 1,265,691 | 826,353 |
Corporate | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total Assets | $ 394,316 | $ 351,732 |
SEGMENT FINANCIAL INFORMATION_3
SEGMENT FINANCIAL INFORMATION (Revenue and Components of Net Operating Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Rental revenues | $ 76,988 | $ 53,596 | $ 212,987 | $ 152,657 |
Rental expenses | (28,095) | (17,842) | (74,305) | (52,318) |
Net operating income | 48,893 | 35,754 | 138,682 | 100,339 |
Real estate-related depreciation and amortization | 36,713 | 18,821 | 101,067 | 52,728 |
Office | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenues | 13,065 | 16,887 | 39,845 | 49,663 |
Rental expenses | (6,296) | (7,111) | (18,259) | (22,116) |
Net operating income | 6,769 | 9,776 | 21,586 | 27,547 |
Real estate-related depreciation and amortization | 3,746 | 4,945 | 11,986 | 14,814 |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenues | 15,303 | 18,679 | 48,879 | 53,600 |
Rental expenses | (4,421) | (4,660) | (12,826) | (13,854) |
Net operating income | 10,882 | 14,019 | 36,053 | 39,746 |
Real estate-related depreciation and amortization | 4,140 | 5,336 | 13,268 | 14,445 |
Residential | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenues | 28,047 | 7,237 | 70,225 | 20,885 |
Rental expenses | (12,261) | (3,257) | (30,265) | (9,666) |
Net operating income | 15,786 | 3,980 | 39,960 | 11,219 |
Real estate-related depreciation and amortization | 13,490 | 2,283 | 37,882 | 7,612 |
Industrial | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenues | 20,573 | 10,793 | 54,038 | 28,509 |
Rental expenses | (5,117) | (2,814) | (12,955) | (6,682) |
Net operating income | 15,456 | 7,979 | 41,083 | 21,827 |
Real estate-related depreciation and amortization | $ 15,337 | $ 6,257 | $ 37,931 | $ 15,857 |
SEGMENT FINANCIAL INFORMATION_4
SEGMENT FINANCIAL INFORMATION (Reconciliation of Net Operating Income to Reported Net Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of net operating income attributable to common shareholders | ||||
Net (loss) income attributable to common stockholders | $ (24,872) | $ 13,940 | $ (9,449) | $ 22,922 |
Debt-related income | (1,548) | (2,298) | (5,862) | (6,741) |
Real estate-related depreciation and amortization | 36,713 | 18,821 | 101,067 | 52,728 |
General and administrative expenses | 3,155 | 2,183 | 7,786 | 6,582 |
Advisory fees | 8,980 | 5,480 | 24,351 | 15,389 |
Performance participation allocation | 3,710 | 3,774 | 22,088 | 7,769 |
Acquisition costs and reimbursements | 1,176 | 738 | 3,898 | 1,451 |
Impairment of real estate property | 0 | 0 | 0 | 758 |
Equity in income from unconsolidated joint venture partnerships | (1,590) | 0 | (2,298) | 0 |
Interest expense | 42,255 | 17,866 | 100,439 | 51,477 |
Gain on sale of real estate property | (11,303) | (25,979) | (94,827) | (53,321) |
Loss on extinguishment of debt and financing commitments, net | 0 | 0 | 8 | 0 |
Other income | (2,534) | (524) | (6,074) | (1,274) |
Net (loss) income attributable to redeemable noncontrolling interests | (253) | 99 | (67) | 169 |
Net (loss) income attributable to noncontrolling interests | (4,996) | 1,654 | (2,378) | 2,430 |
Net operating income | $ 48,893 | $ 35,754 | $ 138,682 | $ 100,339 |