Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-55435 | |
Entity Registrant Name | SILA REALTY TRUST, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-1854011 | |
Entity Address, Address Line One | 1001 Water Street | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | Tampa | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33602 | |
City Area Code | 813 | |
Local Phone Number | 287-0101 | |
Title of 12(b) Security | None | |
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 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001567925 | |
No Trading Symbol Flag | true | |
Current Fiscal Year End Date | --12-31 | |
Class A | ||
Entity Common Stock, Shares Outstanding (in shares) | 169,054,000 | |
Class I | ||
Entity Common Stock, Shares Outstanding (in shares) | 16,942,000 | |
Class T | ||
Entity Common Stock, Shares Outstanding (in shares) | 41,693,000 | |
Class T2 | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Real estate: | ||
Land | $ 168,283 | $ 163,419 |
Buildings and improvements, less accumulated depreciation of $246,257 and $209,118, respectively | 1,716,978 | 1,716,663 |
Total real estate, net | 1,885,261 | 1,880,082 |
Cash and cash equivalents | 14,563 | 12,917 |
Intangible assets, less accumulated amortization of $104,869 and $90,239, respectively | 159,178 | 167,483 |
Goodwill | 20,128 | 21,710 |
Right-of-use assets | 36,649 | 37,443 |
Other assets | 103,346 | 100,167 |
Total assets | 2,219,125 | 2,219,802 |
Liabilities: | ||
Credit facility, net of deferred financing costs of $1,948 and $2,412, respectively | 603,052 | 580,588 |
Accounts payable and other liabilities | 29,871 | 30,619 |
Intangible liabilities, less accumulated amortization of $7,043 and $5,923, respectively | 10,826 | 11,946 |
Total lease liabilities | 41,260 | 41,554 |
Total liabilities | 685,009 | 664,707 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value per share, 510,000,000 shares authorized; 243,870,433 and 241,425,332 shares issued, respectively; 227,555,999 and 226,255,969 shares outstanding, respectively | 2,276 | 2,263 |
Additional paid-in capital | 2,037,177 | 2,024,176 |
Distributions in excess of accumulated earnings | (534,760) | (499,334) |
Accumulated other comprehensive income | 29,423 | 27,990 |
Total stockholders’ equity | 1,534,116 | 1,555,095 |
Total liabilities and stockholders’ equity | $ 2,219,125 | $ 2,219,802 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Buildings and improvements, accumulated depreciation | $ 246,257 | $ 209,118 |
Intangible assets, accumulated amortization | 104,869 | 90,239 |
Credit facility, deferred financing costs | 1,948 | 2,412 |
Intangible liabilities, accumulated amortization | $ 7,043 | $ 5,923 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 510,000,000 | 510,000,000 |
Common stock, shares issued (in shares) | 243,870,433 | 241,425,332 |
Common stock, shares outstanding (in shares) | 227,555,999 | 226,255,969 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Rental revenue | $ 48,542 | $ 46,881 | $ 143,151 | $ 136,081 |
Expenses: | ||||
Rental expenses | 5,005 | 4,590 | 14,728 | 13,219 |
General and administrative expenses | 4,828 | 4,760 | 16,478 | 16,766 |
Depreciation and amortization | 18,097 | 18,641 | 55,452 | 54,443 |
Impairment losses | 0 | 0 | 6,708 | 7,387 |
Total operating expenses | 27,930 | 27,991 | 93,366 | 91,815 |
Gain on real estate dispositions | 1 | 0 | 22 | 460 |
Interest and other expenses, net | 5,630 | 5,498 | 16,769 | 17,942 |
Net income attributable to common stockholders | 14,983 | 13,392 | 33,038 | 26,784 |
Other comprehensive income - unrealized gain on interest rate swaps, net | 2,315 | 16,345 | 1,433 | 34,457 |
Comprehensive income attributable to common stockholders | $ 17,298 | $ 29,737 | $ 34,471 | $ 61,241 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 227,436,306 | 225,638,485 | 226,995,005 | 225,052,921 |
Diluted (in shares) | 229,282,662 | 226,957,015 | 228,843,909 | 226,399,118 |
Net income per common share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.06 | $ 0.15 | $ 0.12 |
Diluted (in dollars per share) | 0.06 | 0.06 | 0.14 | 0.12 |
Distributions declared per common share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Distributions in Excess of Accumulated Earnings | Accumulated Other Comprehensive Income |
Balance, (in shares) at Dec. 31, 2021 | 224,179,939 | |||||
Balance, beginning at Dec. 31, 2021 | $ 1,601,130 | $ 2,242 | $ 2,004,404 | $ (400,669) | $ (4,847) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 2,265,628 | |||||
Issuance of common stock under the distribution reinvestment plan | $ 18,594 | 18,594 | $ 23 | 18,571 | ||
Vesting of restricted stock (in shares) | 174,825 | |||||
Stock-based compensation | 3,034 | $ 1 | 3,033 | |||
Repurchase of common stock (in shares) | (786,861) | |||||
Repurchase of common stock | (6,452) | $ (8) | (6,444) | |||
Distributions to common stockholders | (67,706) | (67,706) | ||||
Other comprehensive income (loss) | 34,457 | 34,457 | ||||
Net income | $ 26,784 | 26,784 | 26,784 | |||
Balance, (in shares) at Sep. 30, 2022 | 225,833,531 | |||||
Balance, ending at Sep. 30, 2022 | 1,609,841 | $ 2,258 | 2,019,564 | (441,591) | 29,610 | |
Balance, (in shares) at Jun. 30, 2022 | 225,240,223 | |||||
Balance, beginning at Jun. 30, 2022 | 1,597,668 | $ 2,252 | 2,014,252 | (432,101) | 13,265 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 767,755 | |||||
Issuance of common stock under the distribution reinvestment plan | 6,304 | $ 8 | 6,296 | |||
Vesting of restricted stock (in shares) | 50,689 | |||||
Stock-based compensation | 860 | 860 | ||||
Repurchase of common stock (in shares) | (225,136) | |||||
Repurchase of common stock | (1,846) | $ (2) | (1,844) | |||
Distributions to common stockholders | (22,882) | (22,882) | ||||
Other comprehensive income (loss) | 16,345 | 16,345 | ||||
Net income | 13,392 | 13,392 | ||||
Balance, (in shares) at Sep. 30, 2022 | 225,833,531 | |||||
Balance, ending at Sep. 30, 2022 | 1,609,841 | $ 2,258 | 2,019,564 | (441,591) | 29,610 | |
Balance, (in shares) at Dec. 31, 2022 | 226,255,969 | 226,255,969 | ||||
Balance, beginning at Dec. 31, 2022 | 1,555,095 | $ 2,263 | 2,024,176 | (499,334) | 27,990 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 2,284,648 | |||||
Issuance of common stock under the distribution reinvestment plan | $ 18,675 | 18,675 | $ 23 | 18,652 | ||
Vesting of restricted stock (in shares) | 160,453 | |||||
Stock-based compensation | 3,721 | $ 1 | 3,720 | |||
Other offering costs | (6) | (6) | ||||
Repurchase of common stock (in shares) | (1,145,071) | |||||
Repurchase of common stock | (9,376) | $ (11) | (9,365) | |||
Distributions to common stockholders | (68,464) | (68,464) | ||||
Other comprehensive income (loss) | 1,433 | 1,433 | ||||
Net income | $ 33,038 | 33,038 | 33,038 | |||
Balance, (in shares) at Sep. 30, 2023 | 227,555,999 | 227,555,999 | ||||
Balance, ending at Sep. 30, 2023 | 1,534,116 | $ 2,276 | 2,037,177 | (534,760) | 29,423 | |
Balance, (in shares) at Jun. 30, 2023 | 227,143,142 | |||||
Balance, beginning at Jun. 30, 2023 | 1,535,863 | $ 2,272 | 2,033,110 | (526,627) | 27,108 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 767,734 | |||||
Issuance of common stock under the distribution reinvestment plan | 6,225 | $ 8 | 6,217 | |||
Vesting of restricted stock (in shares) | 61,002 | |||||
Stock-based compensation | 1,228 | 1,228 | ||||
Repurchase of common stock (in shares) | (415,879) | |||||
Repurchase of common stock | (3,382) | $ (4) | (3,378) | |||
Distributions to common stockholders | (23,116) | (23,116) | ||||
Other comprehensive income (loss) | 2,315 | 2,315 | ||||
Net income | 14,983 | 14,983 | ||||
Balance, (in shares) at Sep. 30, 2023 | 227,555,999 | 227,555,999 | ||||
Balance, ending at Sep. 30, 2023 | $ 1,534,116 | $ 2,276 | $ 2,037,177 | $ (534,760) | $ 29,423 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income attributable to common stockholders | $ 33,038 | $ 26,784 |
Adjustments to reconcile net income attributable to common stockholders to net cash provided by operating activities: | ||
Depreciation and amortization | 55,452 | 54,443 |
Amortization of deferred financing costs | 1,240 | 1,267 |
Amortization of above- and below-market leases | 619 | 362 |
Other amortization expenses | 598 | 1,989 |
Gain on real estate dispositions | (22) | (460) |
Loss on extinguishment of debt | 0 | 3,367 |
Impairment losses | 6,708 | 7,387 |
Straight-line rent adjustments, net of write-offs | (2,490) | (7,653) |
Stock-based compensation | 3,721 | 3,034 |
Changes in operating assets and liabilities: | ||
Accounts payable and other liabilities | (1,063) | (2,647) |
Other assets | 40 | 1,158 |
Net cash provided by operating activities | 97,841 | 89,031 |
Cash flows from investing activities: | ||
Investments in real estate | (69,821) | (157,194) |
Proceeds from real estate dispositions | 12,388 | 22,822 |
Capital expenditures and other costs | (1,590) | (7,577) |
Net cash used in investing activities | (59,023) | (141,949) |
Cash flows from financing activities: | ||
Proceeds from credit facility | 50,000 | 845,000 |
Payments on credit facility | (28,000) | (745,000) |
Payments for extinguishment of debt | 0 | (4) |
Payments of deferred financing costs | (12) | (6,936) |
Repurchase of common stock | (9,376) | (6,452) |
Offering costs on issuance of common stock | (10) | (193) |
Distributions to common stockholders | (49,774) | (48,920) |
Net cash (used in) provided by financing activities | (37,172) | 37,495 |
Net change in cash, cash equivalents and restricted cash | 1,646 | (15,423) |
Cash, cash equivalents and restricted cash - Beginning of period | 13,083 | 32,880 |
Cash, cash equivalents and restricted cash - End of period | 14,729 | 17,457 |
Supplemental cash flow disclosure: | ||
Interest paid, net of interest capitalized | 15,751 | 12,451 |
Supplemental disclosure of non-cash transactions: | ||
Common stock issued through distribution reinvestment plan | 18,675 | 18,594 |
Change in accrued distributions to common stockholders | 15 | 192 |
Change in accounts payable and other liabilities related to capital expenditures and investments in real estate | 244 | (3,295) |
Right-of-use assets obtained in exchange for new lease liabilities | $ 0 | $ 15,305 |
Organization and Business Opera
Organization and Business Operations | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | Organization and Business Operations Sila Realty Trust, Inc., or the Company, is a Maryland corporation, headquartered in Tampa, Florida, that has elected, and currently qualifies, to be taxed as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes. The Company invests in high-quality properties leased to tenants. The Company is primarily focused on investing in healthcare assets across the continuum of care, with emphasis on lower cost patient settings, which the Company believes typically generate predictable, durable and growing income streams. The Company may also make other real estate-related investments, which may include equity or debt interests in other real estate entities. Substantially all of the Company’s business is conducted through Sila Realty Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership. The Company is the sole general partner of the Operating Partnership and directly and indirectly owns 100% of the Operating Partnership. Except as the context otherwise requires, the “Company” refers to Sila Realty Trust, Inc., the Operating Partnership and their wholly-owned subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2022, and related notes thereto set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2023. In the opinion of management, all adjustments, consisting of a normal and recurring nature considered for a fair presentation, have been included. Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and their wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. Restricted Cash Restricted cash consists of cash held in an escrow account in accordance with a tenant's lease agreement. Restricted cash is reported in other assets in the accompanying condensed consolidated balance sheets. The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals shown in the condensed consolidated statements of cash flows (amounts in thousands): Nine Months Ended 2023 2022 Beginning of period: Cash and cash equivalents $ 12,917 $ 32,359 Restricted cash 166 521 Cash, cash equivalents and restricted cash $ 13,083 $ 32,880 End of period: Cash and cash equivalents $ 14,563 $ 17,291 Restricted cash 166 166 Cash, cash equivalents and restricted cash $ 14,729 $ 17,457 Reclassifications The Company determined that certain expenses, previously presented within general and administrative expenses, are more closely related to the operations of its properties. As a result, these amounts have been reclassified to rental expenses for the prior period to conform to the current period presentation. |
Real Estate Investments
Real Estate Investments | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments Real Estate Property Acquisitions During the nine months ended September 30, 2023, the Company purchased two real estate properties in two separate transactions, which were determined to be asset acquisitions. The Company allocated the purchase price to tangible assets, consisting of land, building and improvements and tenant improvements, and intangible assets, consisting of in-place leases, based on the relative fair value method of allocating all accumulated costs. The following table summarizes the consideration transferred and the purchase price allocation for acquisitions during the nine months ended September 30, 2023 (amounts in thousands): Property Description Date Acquired Ownership Percentage Consideration Transferred West Palm Beach Healthcare Facility 06/15/2023 100% $ 9,920 Burr Ridge Healthcare Facility 09/27/2023 100% 59,902 Total $ 69,822 Total Land $ 6,892 Building and improvements 51,337 Tenant improvements 1,826 In-place leases 9,767 Total assets acquired $ 69,822 The Company capitalized acquisition costs of approximately $158,000, which are included in the allocation of the real estate acquisitions presented above. Real Estate Property Dispositions On March 31, 2023, the Company sold one property for a sales price of $12,500,000, consisting of $5,000,000 in cash and $7,500,000 that was structured as a note receivable, which was collected in full on June 30, 2023. Interest income on the note receivable was $105,000 for the nine months ended September 30, 2023, and is recorded in interest and other expenses, net, on the accompanying condensed consolidated statement of comprehensive income. On September 29, 2023, the Company sold one property for a sales price of $250,000. Investment Risk Concentrations As of September 30, 2023, the Company had one exposure to geographic concentration that accounted for at least 10.0% of rental revenue for the nine months ended September 30, 2023. Real estate properties located in the Houston-The Woodlands-Sugar Land, Texas metropolitan statistical area accounted for 10.4% of rental revenue for the nine months ended September 30, 2023. As of September 30, 2023, the Company had one exposure to tenant concentration that accounted for at least 10.0% of rental revenue for the nine months ended September 30, 2023. The leases with tenants at properties under the common control of Post Acute Medical, LLC and its affiliates accounted for 14.3% of rental revenue for the nine months ended September 30, 2023. Impairment Losses The Company recorded impairment losses on real estate of $6,708,000 (including goodwill impairments of $1,582,000), for the nine months ended September 30, 2023, as a result of tenant related triggering events that occurred at certain properties. In addition, during the nine months ended September 30, 2023, the Company recorded an impairment of in-place lease and above-market lease intangible assets of $592,000 and $260,000, respectively. The fair values of these properties were determined based on the guidance in ASC 820 , Fair Value Measurement . These impairments were allocated to the asset groups, for each respective property, on a pro-rata basis, which included land, buildings and improvements, and their related intangible assets. During the nine months ended September 30, 2022, the Company recorded impairment losses on real estate of $7,387,000 (including goodwill impairments of $278,000). In addition, during the nine months ended September 30, 2022, the Company recorded an impairment of an in-place lease intangible asset of $380,000. The property related to the 2022 impairments was sold on March 31, 2023. Impairment losses on real estate (including goodwill impairments) are recorded as impairment losses in the accompanying condensed consolidated statements of comprehensive income. Impairments of in-place leases are included in depreciation and amortization in the accompanying condensed consolidated statements of comprehensive income. Impairments of above-market leases are recorded as a reduction to rental revenue in the accompanying condensed consolidated statements of comprehensive income. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2023 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net, consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands, except weighted average remaining life amounts): September 30, 2023 December 31, 2022 In-place leases, net of accumulated amortization of $98,193 and $83,788, respectively (with a weighted average remaining life of 8.3 years and 8.9 years, respectively) $ 148,800 $ 155,365 Above-market leases, net of accumulated amortization of $6,676 and $6,451, respectively (with a weighted average remaining life of 7.0 years and 7.9 years, respectively) 10,378 12,118 $ 159,178 $ 167,483 The aggregate weighted average remaining life of the intangible assets was 8.2 years and 8.8 years as of September 30, 2023 and December 31, 2022, respectively. Amortization of intangible assets was $5,424,000 and $5,839,000 for the three months ended September 30, 2023 and 2022, respectively, and $17,630,000 and $17,557,000 for the nine months ended September 30, 2023 and 2022, respectively. Amortization of in-place leases is included in depreciation and amortization, and amortization of above-market leases is recorded as an adjustment to rental revenue in the accompanying condensed consolidated statements of comprehensive income. |
Intangible Liabilities, Net
Intangible Liabilities, Net | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Lease Liabilities, Net [Abstract] | |
Intangible Liabilities, Net | Intangible Liabilities, Net Intangible liabilities, net, consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands, except weighted average remaining life amounts): September 30, 2023 December 31, 2022 Below-market leases, net of accumulated amortization of $7,043 and $5,923, respectively (with a weighted average remaining life of 7.6 years and 8.4 years, respectively) $ 10,826 $ 11,946 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Lessor Rental Revenue The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants. Future rent to be received from the Company's investments in real estate assets under the terms of non-cancellable operating leases in effect as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31, and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ 44,254 2024 178,522 2025 174,706 2026 169,052 2027 165,342 Thereafter 990,386 Total $ 1,722,262 Lessee The Company is subject to various non-cancellable operating lease agreements on which certain of its properties reside and for its corporate offices. The Company's operating leases do not provide implicit interest rates. In order to calculate the present value of the remaining operating lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, term of the underlying leases, and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating leases. The effects of the Company's leases are recorded in right-of-use assets and lease liabilities on the condensed consolidated balance sheets. The weighted average remaining lease term for the Company's leases was 36.7 years as of September 30, 2023. The future rent payments, discounted by the Company's IBRs, under non-cancellable operating leases in effect as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ 671 2024 2,746 2025 2,768 2026 2,715 2027 2,681 Thereafter 107,456 Total undiscounted rental payments 119,037 Less imputed interest (77,777) Total lease liabilities $ 41,260 The following table provides details of the Company's total lease costs for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands): Three Months Ended Nine Months Ended Location in Condensed Consolidated Statements of Comprehensive Income 2023 2022 2023 2022 Operating lease costs: Ground lease costs (1) Rental expenses $ 682 $ 615 $ 2,045 $ 1,562 Corporate operating lease costs General and administrative expenses 175 182 551 559 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 166 $ 135 $ 564 $ 354 (1) The Company receives reimbursements from tenants for certain operating ground leases, which are recorded as rental revenue in the accompanying condensed consolidated statements of comprehensive income. |
Leases | Leases Lessor Rental Revenue The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants. Future rent to be received from the Company's investments in real estate assets under the terms of non-cancellable operating leases in effect as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31, and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ 44,254 2024 178,522 2025 174,706 2026 169,052 2027 165,342 Thereafter 990,386 Total $ 1,722,262 Lessee The Company is subject to various non-cancellable operating lease agreements on which certain of its properties reside and for its corporate offices. The Company's operating leases do not provide implicit interest rates. In order to calculate the present value of the remaining operating lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, term of the underlying leases, and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating leases. The effects of the Company's leases are recorded in right-of-use assets and lease liabilities on the condensed consolidated balance sheets. The weighted average remaining lease term for the Company's leases was 36.7 years as of September 30, 2023. The future rent payments, discounted by the Company's IBRs, under non-cancellable operating leases in effect as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ 671 2024 2,746 2025 2,768 2026 2,715 2027 2,681 Thereafter 107,456 Total undiscounted rental payments 119,037 Less imputed interest (77,777) Total lease liabilities $ 41,260 The following table provides details of the Company's total lease costs for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands): Three Months Ended Nine Months Ended Location in Condensed Consolidated Statements of Comprehensive Income 2023 2022 2023 2022 Operating lease costs: Ground lease costs (1) Rental expenses $ 682 $ 615 $ 2,045 $ 1,562 Corporate operating lease costs General and administrative expenses 175 182 551 559 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 166 $ 135 $ 564 $ 354 (1) The Company receives reimbursements from tenants for certain operating ground leases, which are recorded as rental revenue in the accompanying condensed consolidated statements of comprehensive income. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2023 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands): September 30, 2023 December 31, 2022 Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $1,654 and $889, respectively $ 2,470 $ 3,178 Leasing commissions, net of accumulated amortization of $174 and $167, respectively 610 775 Restricted cash 166 166 Tenant receivables 1,966 1,736 Straight-line rent receivable 64,805 62,457 Prepaid and other assets 3,906 3,865 Derivative assets 29,423 27,990 $ 103,346 $ 100,167 |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands): September 30, 2023 December 31, 2022 Accounts payable and accrued expenses $ 4,236 $ 5,387 Accrued interest expense 1,903 1,941 Accrued property taxes 4,606 2,421 Accrued personnel costs 2,645 3,940 Distributions payable to stockholders 7,518 7,719 Performance DSUs distributions payable 789 573 Tenant deposits 877 877 Deferred rental income 7,297 7,761 $ 29,871 $ 30,619 |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility The Company's outstanding credit facility as of September 30, 2023 and December 31, 2022 consisted of the following (amounts in thousands): September 30, 2023 December 31, 2022 Variable rate revolving line of credit $ 50,000 $ 8,000 Variable rate term loans fixed through interest rate swaps 525,000 485,000 Variable rate term loans 30,000 90,000 Total credit facility, principal amount outstanding 605,000 583,000 Unamortized deferred financing costs related to credit facility term loans (1,948) (2,412) Total credit facility, net of deferred financing costs $ 603,052 $ 580,588 Significant activities regarding the credit facility during the nine months ended September 30, 2023 include: • On February 17, 2023, the Company entered into an interest rate swap agreement to hedge $40,000,000 of its variable rate term loans with an effective date of March 1, 2023. • On March 8, 2023, the Company repaid $8,000,000 on its revolving line of credit with cash flows from operations. • On April 13, 2023, the Company repaid $10,000,000 on its 2024 term loan with proceeds from a disposition and cash flows from operations. • On July 13, 2023, the Company repaid $10,000,000 on its 2024 term loan with proceeds from the collection of a note receivable related to a disposition and cash flows from operations. • On September 26, 2023, the Company drew $50,000,000 on its revolving line of credit to fund an acquisition. The principal payments due on the credit facility as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ — 2024 (1) 280,000 2025 — 2026 50,000 2027 — Thereafter 275,000 $ 605,000 (1) The 2024 term loan has a maturity date of December 31, 2024, and, at the Company's election, may be extended for a period of six-months on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Cash and cash equivalents, restricted cash, tenant receivables, prepaid and other assets, accounts payable and other liabilities —The Company considers the carrying values of these financial instruments, assets and liabilities, to approximate fair value because of the short period of time between origination of the instruments and their expected realization. Credit facility —The outstanding principal of the credit facility was $605,000,000 and $583,000,000, which approximated its fair value due to the variable nature of the terms as of September 30, 2023 and December 31, 2022, respectively. The fair value of the Company's credit facility is estimated based on the interest rates currently offered to the Company by its financial institutions. Derivative instruments —The Company’s derivative instruments consist of interest rate swaps. These swaps are carried at fair value to comply with the provisions of ASC 820. The fair value of these instruments is determined using interest rate market pricing models. The Company incorporated credit valuation adjustments to appropriately reflect the Company’s nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. The Company determined that the majority of the inputs used to value its interest rate swaps fall within Level 2 of the fair value hierarchy. The credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the respective counterparty. However, as of September 30, 2023, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy. Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize or be liable for on disposition of the financial assets and liabilities. The following tables show the fair value of the Company’s financial assets that are required to be measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 (amounts in thousands): September 30, 2023 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 29,423 $ — $ 29,423 Total assets at fair value $ — $ 29,423 $ — $ 29,423 December 31, 2022 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 27,990 $ — $ 27,990 Total assets at fair value $ — $ 27,990 $ — $ 27,990 Derivative assets are reported in the condensed consolidated balance sheets as other assets. Real Estate Assets —Certain real estate assets (which include land, buildings and improvements and intangible assets) were adjusted to fair value as a result of impairments which occurred during the nine months ended September 30, 2023. The fair values of real estate assets were determined by using either third-party purchase offers or comparable sales information. The fair values of real estate assets based on third-party purchase offers are reflected in the Level 2 fair value hierarchy. The comparable sales technique uses estimates of properties similar to the subject property by comparing prices per square foot considering recent transaction activity. The estimates of comparable sales and prices per square foot have been adjusted, and are considered significant inputs and thus are classified within Level 3 of the fair value hierarchy. The following table shows the fair value of the Company's real estate assets, including intangible assets, measured at fair value on a non-recurring basis as of the date on which the event took place, which was June 30, 2023 (amounts in thousands): June 30, 2023 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Unobservable Inputs (Level 3) (1) Total Fair Total Losses (2) Real estate assets $ — $ 20,726 $ 1,552 $ 22,278 $ 5,978 (1) The fair value of real estate assets was derived using the comparable sales technique. The comparable sales price per square foot of $98.04 used in determining the fair value is considered a significant unobservable input. (2) Amount includes impairment of in-place lease and above-market lease intangible assets of $592,000 and $260,000, respectively. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest and other expenses, net, as interest is incurred on the Company’s variable rate debt. During the next twelve months, the Company estimates that an additional $17,453,000 will be reclassified from accumulated other comprehensive income as a reduction to interest expense. The following table summarizes the notional amount and fair value of the Company’s derivative instruments (amounts in thousands): Derivatives Balance Effective Maturity September 30, 2023 December 31, 2022 Outstanding Fair Value of Outstanding Fair Value of Assets Assets Interest rate swaps (1) 05/01/2022 to 12/31/2024 to $ 525,000 $ 29,423 $ 485,000 $ 27,990 (1) Derivative assets are reported in the condensed consolidated balance sheets as other assets. The notional amount under the agreements is an indication of the extent of the Company’s involvement in each instrument at the time, but does not represent exposure to credit, interest rate or market risks. The table below summarizes the amount of income recognized on the interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands): Derivatives in Cash Flow Amount of Income Recognized Location of Income Amount of Income (Loss) Total Amount of Line Item in Condensed Consolidated Statements of Comprehensive Income Three Months Ended September 30, 2023 Interest rate swaps $ 6,780 Interest and other expenses, net $ 4,465 $ 5,630 Three Months Ended September 30, 2022 Interest rate swaps $ 16,724 Interest and other expenses, net $ 379 $ 5,498 Nine Months Ended September 30, 2023 Interest rate swaps $ 13,550 Interest and other expenses, net $ 12,117 $ 16,769 Nine Months Ended September 30, 2022 Interest rate swaps $ 31,545 Interest and other expenses, net $ (2,912) $ 17,942 Credit Risk-Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The Company records credit risk valuation adjustments on its interest rate swaps based on the respective credit quality of the Company and the counterparty. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. As of September 30, 2023, the Company had no derivatives with fair value in a net liability position, inclusive of accrued interest but excluding any adjustment for nonperformance risk related to the agreement. As of September 30, 2023, there were no termination events or events of default related to the interest rate swaps. Tabular Disclosure Offsetting Derivatives The Company has elected not to offset derivative positions in its condensed consolidated financial statements. The following tables present the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of September 30, 2023 and December 31, 2022 (amounts in thousands): Offsetting of Derivative Assets Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net September 30, 2023 $ 29,423 $ — $ 29,423 $ — $ — $ 29,423 December 31, 2022 $ 27,990 $ — $ 27,990 $ — $ — $ 27,990 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Distributions Payable As of September 30, 2023, the Company had distributions payable of approximately $7,518,000. Of these distributions payable, approximately $5,502,000 was paid in cash on October 6, 2023, and approximately $2,016,000 was reinvested in shares of common stock pursuant to our distribution reinvestment plan, or the DRIP, effective October 1, 2023. Share Repurchase Program The Company’s Amended and Restated Share Repurchase Program allows for repurchases of shares of the Company’s common stock upon meeting certain criteria. During the nine months ended September 30, 2023, the Company repurchased 1,145,071 Class A shares, Class I shares and Class T shares of common stock (879,861 Class A shares, 102,570 Class I shares and 162,640 Class T shares), for an aggregate purchase price of approximately $9,376,000 (an average of $8.19 per share). During the nine months ended September 30, 2022, the Company repurchased 786,861 Class A shares, Class I shares and Class T shares of common stock (690,494 Class A shares, 20,905 Class I shares and 75,462 Class T shares), for an aggregate purchase price of approximately $6,452,000 (an average of $8.20 per share). Accumulated Other Comprehensive Income The following table presents a rollforward of amounts recognized in accumulated other comprehensive income by component for the nine months ended September 30, 2023 and 2022 (amounts in thousands): Unrealized Income on Derivative Instruments Balance as of December 31, 2022 $ 27,990 Other comprehensive income before reclassification 13,550 Amount of income reclassified from accumulated other comprehensive income to net income (12,117) Other comprehensive income 1,433 Balance as of September 30, 2023 $ 29,423 Unrealized Income Balance as of December 31, 2021 $ (4,847) Other comprehensive income before reclassification 31,545 Amount of loss reclassified from accumulated other comprehensive loss to net income 2,912 Other comprehensive income 34,457 Balance as of September 30, 2022 $ 29,610 The following table presents reclassifications out of accumulated other comprehensive income for the nine months ended September 30, 2023 and 2022 (amounts in thousands): Details about Accumulated Other (Income) Loss Amounts Reclassified from Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income Nine Months Ended 2023 2022 Interest rate swap contracts $ (12,117) $ 2,912 Interest and other expense, net |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareThe Company calculates basic earnings per share by dividing net income attributable to common stockholders for the period by the weighted average shares of its common stock outstanding for that period. Diluted earnings per share is computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Shares of non-vested restricted common stock and performance-based deferred stock unit awards, or Performance DSUs, give rise to potentially dilutive shares of common stock. For the three and nine months ended September 30, 2023, diluted earnings per share reflected the effect of approximately 1,846,000 and 1,849,000, respectively, of non-vested shares of restricted common stock and Performance DSUs that were outstanding. For the three and nine months ended September 30, 2022, diluted earnings per share reflected the effect of approximately 1,319,000 and 1,346,000, respectively, of non-vested shares of restricted common stock and Performance DSUs that were outstanding. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation On March 6, 2020, the Board approved the Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, pursuant to which the Company has the authority and power to grant awards of restricted shares of its Class A common stock to its directors, executive officers and employees. During the nine months ended September 30, 2023, the Company granted time-based awards to its executive officers and certain employees, consisting of 284,063 restricted shares of Class A common stock, or the Time-Based 2023 Awards. The Time-Based 2023 Awards will vest ratably over four years following the grant date, subject to each executive's and employee's employment through the applicable vesting dates, with certain exceptions. In addition, during the nine months ended September 30, 2023, the Company's compensation committee approved Performance DSUs to be granted to its executive officers for performance-based awards, or the Performance-Based 2023 Awards. The Performance-Based 2023 Awards will be measured based on Company performance over a three-year performance period ending on December 31, 2025. Subject to each executive's continuous employment through the applicable vesting dates, with certain exceptions, the Performance-Based DSUs, if any, will be issued following the performance period end date. The actual value realized by each executive will depend on the market value of shares of stock or units on the date that the awards vest and the actual number of shares of stock or units that vest. The Company recognized total stock-based compensation expense of $1,228,000 and $860,000, respectively, for the three months ended September 30, 2023 and 2022, and $3,721,000 and $3,034,000, respectively, for the nine months ended September 30, 2023, and 2022. Stock-based compensation expense is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income, and forfeitures are recorded as they occur. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings In the ordinary course of business, the Company may become subject to litigation or claims. As of September 30, 2023, there were, and currently there are, no material pending legal proceedings to which the Company is a party. While the resolution of a lawsuit or proceeding may have an impact to the Company's financial results for the period in which it is resolved, the Company believes that the final resolution of the lawsuits or proceedings in which it is currently involved, either individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations or liquidity. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distributions Paid to Stockholders The following table summarizes the Company's distributions paid to stockholders on October 6, 2023, for the period from September 1, 2023 through September 30, 2023 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution October 6, 2023 Class A $ 4,419 $ 1,176 $ 5,595 October 6, 2023 Class I 333 222 555 October 6, 2023 Class T 750 618 1,368 $ 5,502 $ 2,016 $ 7,518 The following table summarizes the Company's distributions paid to stockholders on November 7, 2023, for the period from October 1, 2023 through October 31, 2023 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution November 7, 2023 Class A $ 4,581 $ 1,205 $ 5,786 November 7, 2023 Class I 346 229 575 November 7, 2023 Class T 779 637 1,416 $ 5,706 $ 2,071 $ 7,777 Distributions Authorized The following tables summarize the daily distributions approved and authorized by the Board subsequent to September 30, 2023: Authorization Date (1) Common Stock Daily Distribution Rate (1) Annualized Distribution Per Share October 17, 2023 Class A $ 0.00109589 $ 0.40 October 17, 2023 Class I $ 0.00109589 $ 0.40 October 17, 2023 Class T $ 0.00109589 $ 0.40 Authorization Date (2) Common Stock Daily Distribution Rate (2) Annualized Distribution Per Share November 7, 2023 Class A $ 0.00109589 $ 0.40 November 7, 2023 Class I $ 0.00109589 $ 0.40 November 7, 2023 Class T $ 0.00109589 $ 0.40 (1) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on November 1, 2023 and ending on November 30, 2023. The distributions are calculated based on 365 days in the calendar year. The distributions declared for each record date in November 2023 will be paid in December 2023. The distributions are payable to stockholders from legally available funds therefor. (2) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on December 1, 2023 and ending on December 31, 2023. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in December 2023 will be paid in January 2024. The distributions will be payable to stockholders from legally available funds therefor. Repayment on Credit Facility On November 1, 2023, the Company repaid $8,000,000 on its revolving line of credit with cash flows from operations and proceeds from a disposition. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) attributable to common stockholders | $ 14,983 | $ 13,392 | $ 33,038 | $ 26,784 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and their wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. |
Restricted Cash | Restricted CashRestricted cash consists of cash held in an escrow account in accordance with a tenant's lease agreement. Restricted cash is reported in other assets in the accompanying condensed consolidated balance sheets. |
Reclassifications | Reclassifications The Company determined that certain expenses, previously presented within general and administrative expenses, are more closely related to the operations of its properties. As a result, these amounts have been reclassified to rental expenses for the prior period to conform to the current period presentation. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals shown in the condensed consolidated statements of cash flows (amounts in thousands): Nine Months Ended 2023 2022 Beginning of period: Cash and cash equivalents $ 12,917 $ 32,359 Restricted cash 166 521 Cash, cash equivalents and restricted cash $ 13,083 $ 32,880 End of period: Cash and cash equivalents $ 14,563 $ 17,291 Restricted cash 166 166 Cash, cash equivalents and restricted cash $ 14,729 $ 17,457 |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of Consideration Transferred for Properties Acquired | The following table summarizes the consideration transferred and the purchase price allocation for acquisitions during the nine months ended September 30, 2023 (amounts in thousands): Property Description Date Acquired Ownership Percentage Consideration Transferred West Palm Beach Healthcare Facility 06/15/2023 100% $ 9,920 Burr Ridge Healthcare Facility 09/27/2023 100% 59,902 Total $ 69,822 |
Schedule of Allocation of Acquisitions | Total Land $ 6,892 Building and improvements 51,337 Tenant improvements 1,826 In-place leases 9,767 Total assets acquired $ 69,822 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net, consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands, except weighted average remaining life amounts): September 30, 2023 December 31, 2022 In-place leases, net of accumulated amortization of $98,193 and $83,788, respectively (with a weighted average remaining life of 8.3 years and 8.9 years, respectively) $ 148,800 $ 155,365 Above-market leases, net of accumulated amortization of $6,676 and $6,451, respectively (with a weighted average remaining life of 7.0 years and 7.9 years, respectively) 10,378 12,118 $ 159,178 $ 167,483 |
Intangible Liabilities, Net (Ta
Intangible Liabilities, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Lease Liabilities, Net [Abstract] | |
Schedule of Intangible Liabilities, Net | Intangible liabilities, net, consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands, except weighted average remaining life amounts): September 30, 2023 December 31, 2022 Below-market leases, net of accumulated amortization of $7,043 and $5,923, respectively (with a weighted average remaining life of 7.6 years and 8.4 years, respectively) $ 10,826 $ 11,946 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Future Minimum Rent to Lessor from Operating Leases | Future rent to be received from the Company's investments in real estate assets under the terms of non-cancellable operating leases in effect as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31, and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ 44,254 2024 178,522 2025 174,706 2026 169,052 2027 165,342 Thereafter 990,386 Total $ 1,722,262 |
Schedule of Future Minimum Rent from Lessee for Operating Leases | The future rent payments, discounted by the Company's IBRs, under non-cancellable operating leases in effect as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ 671 2024 2,746 2025 2,768 2026 2,715 2027 2,681 Thereafter 107,456 Total undiscounted rental payments 119,037 Less imputed interest (77,777) Total lease liabilities $ 41,260 |
Schedule of Lease Cost | The following table provides details of the Company's total lease costs for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands): Three Months Ended Nine Months Ended Location in Condensed Consolidated Statements of Comprehensive Income 2023 2022 2023 2022 Operating lease costs: Ground lease costs (1) Rental expenses $ 682 $ 615 $ 2,045 $ 1,562 Corporate operating lease costs General and administrative expenses 175 182 551 559 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 166 $ 135 $ 564 $ 354 (1) The Company receives reimbursements from tenants for certain operating ground leases, which are recorded as rental revenue in the accompanying condensed consolidated statements of comprehensive income. |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands): September 30, 2023 December 31, 2022 Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $1,654 and $889, respectively $ 2,470 $ 3,178 Leasing commissions, net of accumulated amortization of $174 and $167, respectively 610 775 Restricted cash 166 166 Tenant receivables 1,966 1,736 Straight-line rent receivable 64,805 62,457 Prepaid and other assets 3,906 3,865 Derivative assets 29,423 27,990 $ 103,346 $ 100,167 |
Accounts Payable and Other Li_2
Accounts Payable and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Accounts payable and other liabilities consisted of the following as of September 30, 2023 and December 31, 2022 (amounts in thousands): September 30, 2023 December 31, 2022 Accounts payable and accrued expenses $ 4,236 $ 5,387 Accrued interest expense 1,903 1,941 Accrued property taxes 4,606 2,421 Accrued personnel costs 2,645 3,940 Distributions payable to stockholders 7,518 7,719 Performance DSUs distributions payable 789 573 Tenant deposits 877 877 Deferred rental income 7,297 7,761 $ 29,871 $ 30,619 |
Credit Facility (Tables)
Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facility | The Company's outstanding credit facility as of September 30, 2023 and December 31, 2022 consisted of the following (amounts in thousands): September 30, 2023 December 31, 2022 Variable rate revolving line of credit $ 50,000 $ 8,000 Variable rate term loans fixed through interest rate swaps 525,000 485,000 Variable rate term loans 30,000 90,000 Total credit facility, principal amount outstanding 605,000 583,000 Unamortized deferred financing costs related to credit facility term loans (1,948) (2,412) Total credit facility, net of deferred financing costs $ 603,052 $ 580,588 |
Schedule of Future Principal Payments Due on Debt | The principal payments due on the credit facility as of September 30, 2023, for the period ending December 31, 2023, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): September 30, 2023 Period ending December 31, 2023 $ — 2024 (1) 280,000 2025 — 2026 50,000 2027 — Thereafter 275,000 $ 605,000 (1) The 2024 term loan has a maturity date of December 31, 2024, and, at the Company's election, may be extended for a period of six-months on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables show the fair value of the Company’s financial assets that are required to be measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 (amounts in thousands): September 30, 2023 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 29,423 $ — $ 29,423 Total assets at fair value $ — $ 29,423 $ — $ 29,423 December 31, 2022 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 27,990 $ — $ 27,990 Total assets at fair value $ — $ 27,990 $ — $ 27,990 |
Schedule of Fair Value, Real Estate Assets Measured on Non-Recurring Basis | The following table shows the fair value of the Company's real estate assets, including intangible assets, measured at fair value on a non-recurring basis as of the date on which the event took place, which was June 30, 2023 (amounts in thousands): June 30, 2023 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Unobservable Inputs (Level 3) (1) Total Fair Total Losses (2) Real estate assets $ — $ 20,726 $ 1,552 $ 22,278 $ 5,978 (1) The fair value of real estate assets was derived using the comparable sales technique. The comparable sales price per square foot of $98.04 used in determining the fair value is considered a significant unobservable input. (2) Amount includes impairment of in-place lease and above-market lease intangible assets of $592,000 and $260,000, respectively. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of the Notional Amount and Fair Value of Derivative Instruments | The following table summarizes the notional amount and fair value of the Company’s derivative instruments (amounts in thousands): Derivatives Balance Effective Maturity September 30, 2023 December 31, 2022 Outstanding Fair Value of Outstanding Fair Value of Assets Assets Interest rate swaps (1) 05/01/2022 to 12/31/2024 to $ 525,000 $ 29,423 $ 485,000 $ 27,990 (1) Derivative assets are reported in the condensed consolidated balance sheets as other assets. |
Schedule of Income and Losses Recognized on Derivative Instruments | The table below summarizes the amount of income recognized on the interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands): Derivatives in Cash Flow Amount of Income Recognized Location of Income Amount of Income (Loss) Total Amount of Line Item in Condensed Consolidated Statements of Comprehensive Income Three Months Ended September 30, 2023 Interest rate swaps $ 6,780 Interest and other expenses, net $ 4,465 $ 5,630 Three Months Ended September 30, 2022 Interest rate swaps $ 16,724 Interest and other expenses, net $ 379 $ 5,498 Nine Months Ended September 30, 2023 Interest rate swaps $ 13,550 Interest and other expenses, net $ 12,117 $ 16,769 Nine Months Ended September 30, 2022 Interest rate swaps $ 31,545 Interest and other expenses, net $ (2,912) $ 17,942 |
Schedule of Offsetting of Derivative Assets | The following tables present the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of September 30, 2023 and December 31, 2022 (amounts in thousands): Offsetting of Derivative Assets Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net September 30, 2023 $ 29,423 $ — $ 29,423 $ — $ — $ 29,423 December 31, 2022 $ 27,990 $ — $ 27,990 $ — $ — $ 27,990 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss) | The following table presents a rollforward of amounts recognized in accumulated other comprehensive income by component for the nine months ended September 30, 2023 and 2022 (amounts in thousands): Unrealized Income on Derivative Instruments Balance as of December 31, 2022 $ 27,990 Other comprehensive income before reclassification 13,550 Amount of income reclassified from accumulated other comprehensive income to net income (12,117) Other comprehensive income 1,433 Balance as of September 30, 2023 $ 29,423 Unrealized Income Balance as of December 31, 2021 $ (4,847) Other comprehensive income before reclassification 31,545 Amount of loss reclassified from accumulated other comprehensive loss to net income 2,912 Other comprehensive income 34,457 Balance as of September 30, 2022 $ 29,610 |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | The following table presents reclassifications out of accumulated other comprehensive income for the nine months ended September 30, 2023 and 2022 (amounts in thousands): Details about Accumulated Other (Income) Loss Amounts Reclassified from Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income Nine Months Ended 2023 2022 Interest rate swap contracts $ (12,117) $ 2,912 Interest and other expense, net |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Schedule of Subsequent Events | The following table summarizes the Company's distributions paid to stockholders on October 6, 2023, for the period from September 1, 2023 through September 30, 2023 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution October 6, 2023 Class A $ 4,419 $ 1,176 $ 5,595 October 6, 2023 Class I 333 222 555 October 6, 2023 Class T 750 618 1,368 $ 5,502 $ 2,016 $ 7,518 The following table summarizes the Company's distributions paid to stockholders on November 7, 2023, for the period from October 1, 2023 through October 31, 2023 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution November 7, 2023 Class A $ 4,581 $ 1,205 $ 5,786 November 7, 2023 Class I 346 229 575 November 7, 2023 Class T 779 637 1,416 $ 5,706 $ 2,071 $ 7,777 Distributions Authorized The following tables summarize the daily distributions approved and authorized by the Board subsequent to September 30, 2023: Authorization Date (1) Common Stock Daily Distribution Rate (1) Annualized Distribution Per Share October 17, 2023 Class A $ 0.00109589 $ 0.40 October 17, 2023 Class I $ 0.00109589 $ 0.40 October 17, 2023 Class T $ 0.00109589 $ 0.40 Authorization Date (2) Common Stock Daily Distribution Rate (2) Annualized Distribution Per Share November 7, 2023 Class A $ 0.00109589 $ 0.40 November 7, 2023 Class I $ 0.00109589 $ 0.40 November 7, 2023 Class T $ 0.00109589 $ 0.40 (1) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on November 1, 2023 and ending on November 30, 2023. The distributions are calculated based on 365 days in the calendar year. The distributions declared for each record date in November 2023 will be paid in December 2023. The distributions are payable to stockholders from legally available funds therefor. (2) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on December 1, 2023 and ending on December 31, 2023. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in December 2023 will be paid in January 2024. The distributions will be payable to stockholders from legally available funds therefor. |
Organization and Business Ope_2
Organization and Business Operations (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Operating Partnership | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Ownership interest (as a percentage) | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Reconciliation of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 14,563 | $ 12,917 | $ 17,291 | $ 32,359 |
Restricted cash | 166 | 166 | 166 | 521 |
Cash, cash equivalents and restricted cash | $ 14,729 | $ 13,083 | $ 17,457 | $ 32,880 |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Sep. 29, 2023 USD ($) property | Mar. 31, 2023 USD ($) property | Sep. 30, 2023 USD ($) property statisticalArea tenant | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) property statisticalArea tenant | Sep. 30, 2022 USD ($) | Jun. 29, 2023 USD ($) | |
Real Estate [Line Items] | ||||||||
Number of real estate properties owned | property | 2 | 2 | ||||||
Capitalized acquisition costs | $ 158,000 | |||||||
Proceeds from real estate dispositions | 12,388,000 | $ 22,822,000 | ||||||
Gain on real estate dispositions | $ 1,000 | $ 0 | 22,000 | 460,000 | ||||
Impairment loss | $ 0 | $ 0 | 6,708,000 | 7,387,000 | ||||
Impairment loss on goodwill | 1,582,000 | 278,000 | ||||||
In-place leases | ||||||||
Real Estate [Line Items] | ||||||||
Impairment of intangible assets | $ 592,000 | 592,000 | $ 380,000 | |||||
Above-market leases | ||||||||
Real Estate [Line Items] | ||||||||
Impairment of intangible assets | $ 260,000 | $ 260,000 | ||||||
Revenue | Geographic Concentration Risk | Houston-The Woodlands-Sugar Land, Texas MSA | ||||||||
Real Estate [Line Items] | ||||||||
Number of geographic concentration | statisticalArea | 1 | 1 | ||||||
Concentration risk, percentage | 10.40% | |||||||
Revenue | Customer Concentration Risk | One Tenant | ||||||||
Real Estate [Line Items] | ||||||||
Number of major tenants | tenant | 1 | 1 | ||||||
Revenue | Customer Concentration Risk | Post Acute Medical LLC and affiliates | ||||||||
Real Estate [Line Items] | ||||||||
Concentration risk, percentage | 14.30% | |||||||
2023 Real Estate Property Disposition, 1 | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Real Estate [Line Items] | ||||||||
Number of real estate properties sold | property | 1 | |||||||
Sale price of real estate dispositions | $ 12,500,000 | |||||||
Sales price of real estate disposition, cash | $ 5,000,000 | |||||||
Note receivable | $ 7,500,000 | |||||||
Interest income on notes receivable | $ 105,000 | |||||||
2023 Real Estate Property Disposition, 2 | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||||
Real Estate [Line Items] | ||||||||
Number of real estate properties sold | property | 1 | |||||||
Sale price of real estate dispositions | $ 250,000 |
Real Estate Investments (Schedu
Real Estate Investments (Schedule of Consideration Transferred for Properties Acquired) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 27, 2023 | Jun. 15, 2023 | Sep. 30, 2023 | |
Business Acquisition [Line Items] | |||
Consideration transferred | $ 69,822 | ||
West Palm Beach Healthcare Facility | |||
Business Acquisition [Line Items] | |||
Ownership Percentage | 100% | ||
Consideration transferred | $ 9,920 | ||
Burr Ridge Healthcare Facility | |||
Business Acquisition [Line Items] | |||
Ownership Percentage | 100% | ||
Consideration transferred | $ 59,902 |
Real Estate Investments (Sche_2
Real Estate Investments (Schedule of Allocation of Acquisitions) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Total assets acquired | $ 69,822 |
In-place leases | |
Business Acquisition [Line Items] | |
Leases | 9,767 |
Land | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | 6,892 |
Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | 51,337 |
Tenant improvements | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | $ 1,826 |
Intangible Assets, Net (Schedul
Intangible Assets, Net (Schedule of Intangible Assets, Net) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, accumulated amortization | $ 104,869 | $ 90,239 |
Weighted average remaining useful life of intangible assets (in years) | 8 years 2 months 12 days | 8 years 9 months 18 days |
Intangible assets, net of accumulated amortization | $ 159,178 | $ 167,483 |
In-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, accumulated amortization | $ 98,193 | $ 83,788 |
Weighted average remaining useful life of intangible assets (in years) | 8 years 3 months 18 days | 8 years 10 months 24 days |
Intangible assets, net of accumulated amortization | $ 148,800 | $ 155,365 |
Above-market leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, accumulated amortization | $ 6,676 | $ 6,451 |
Weighted average remaining useful life of intangible assets (in years) | 7 years | 7 years 10 months 24 days |
Intangible assets, net of accumulated amortization | $ 10,378 | $ 12,118 |
Intangible Assets, Net (Narrati
Intangible Assets, Net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Weighted average remaining useful life of intangible assets (in years) | 8 years 2 months 12 days | 8 years 9 months 18 days | |||
Amortization of intangible assets | $ 5,424 | $ 5,839 | $ 17,630 | $ 17,557 |
Intangible Liabilities, Net (Sc
Intangible Liabilities, Net (Schedule of Intangible Liabilities, Net) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Intangible Lease Liabilities, Net [Abstract] | ||
Accumulated amortization of below-market leases | $ 7,043 | $ 5,923 |
Weighted average remaining life of below-market leases | 7 years 7 months 6 days | 8 years 4 months 24 days |
Below-market leases, net of accumulated amortization | $ 10,826 | $ 11,946 |
Intangible Liabilities, Net (Na
Intangible Liabilities, Net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Intangible Lease Liabilities, Net [Abstract] | ||||
Amortization of below-market leases | $ 373 | $ 373 | $ 1,120 | $ 1,106 |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Rent to Lessor from Operating Leases) (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
Period ending December 31, 2023 | $ 44,254 |
2024 | 178,522 |
2025 | 174,706 |
2026 | 169,052 |
2027 | 165,342 |
Thereafter | 990,386 |
Total | $ 1,722,262 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | Sep. 30, 2023 |
Leases [Abstract] | |
Operating lease, weighted average remaining lease term (in years) | 36 years 8 months 12 days |
Leases (Schedule of Rent Paymen
Leases (Schedule of Rent Payments from Lessee) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Period ending December 31, 2023 | $ 671 | |
2024 | 2,746 | |
2025 | 2,768 | |
2026 | 2,715 | |
2027 | 2,681 | |
Thereafter | 107,456 | |
Total undiscounted rental payments | 119,037 | |
Less imputed interest | (77,777) | |
Total lease liabilities | $ 41,260 | $ 41,554 |
Leases (Schedule of Lease Cost)
Leases (Schedule of Lease Cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows for operating leases | $ 166 | $ 135 | $ 564 | $ 354 |
Rental expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease costs | 682 | 615 | 2,045 | 1,562 |
General and administrative expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease costs | $ 175 | $ 182 | $ 551 | $ 559 |
Other Assets (Schedule of Other
Other Assets (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other Assets [Abstract] | ||
Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $1,654 and $889, respectively | $ 2,470 | $ 3,178 |
Leasing commissions, net of accumulated amortization of $174 and $167, respectively | 610 | 775 |
Restricted cash | 166 | 166 |
Tenant receivables | 1,966 | 1,736 |
Straight-line rent receivable | 64,805 | 62,457 |
Prepaid and other assets | 3,906 | 3,865 |
Derivative assets | 29,423 | 27,990 |
Total other assets | 103,346 | 100,167 |
Deferred financing costs, related to the revolver portion of the credit facility, accumulated amortization | 1,654 | 889 |
Leasing commissions, accumulated amortization | $ 174 | $ 167 |
Accounts Payable and Other Li_3
Accounts Payable and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 4,236 | $ 5,387 |
Accrued interest expense | 1,903 | 1,941 |
Accrued property taxes | 4,606 | 2,421 |
Accrued personnel costs | 2,645 | 3,940 |
Distributions payable to stockholders | 7,518 | 7,719 |
Performance DSUs distributions payable | 789 | 573 |
Tenant deposits | 877 | 877 |
Deferred rental income | 7,297 | 7,761 |
Total accounts payable and other liabilities | $ 29,871 | $ 30,619 |
Credit Facility (Schedule of Cr
Credit Facility (Schedule of Credit Facility) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Total credit facility, principal amount outstanding | $ 605,000 | $ 583,000 |
Unamortized deferred financing costs related to credit facility term loans | (1,948) | (2,412) |
Total credit facility, net of deferred financing costs | 603,052 | 580,588 |
Revolving Line of Credit | Variable rate revolving line of credit | ||
Line of Credit Facility [Line Items] | ||
Total credit facility, principal amount outstanding | 50,000 | 8,000 |
Term Loan | Variable rate term loans fixed through interest rate swaps | ||
Line of Credit Facility [Line Items] | ||
Total credit facility, principal amount outstanding | 525,000 | 485,000 |
Term Loan | Variable rate term loans | ||
Line of Credit Facility [Line Items] | ||
Total credit facility, principal amount outstanding | $ 30,000 | $ 90,000 |
Credit Facility (Narrative) (De
Credit Facility (Narrative) (Details) - USD ($) | 9 Months Ended | |||||||
Nov. 01, 2023 | Sep. 26, 2023 | Jul. 13, 2023 | Apr. 13, 2023 | Mar. 08, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 17, 2023 | |
Line of Credit Facility [Line Items] | ||||||||
Payments on credit facility | $ 28,000,000 | $ 745,000,000 | ||||||
Proceeds from credit facility | $ 50,000,000 | $ 845,000,000 | ||||||
Subsequent Event | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Payments on credit facility | $ 8,000,000 | |||||||
Revolving Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Payments on credit facility | $ 8,000,000 | |||||||
Proceeds from credit facility | $ 50,000,000 | |||||||
Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Payments on credit facility | $ 10,000,000 | $ 10,000,000 | ||||||
Interest Rate Swap, Effective Date March 1, 2023 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Notional amount | $ 40,000,000 |
Credit Facility (Schedule of Pr
Credit Facility (Schedule of Principal Payments Due on Credit Facility) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) Extension | |
Debt Disclosure [Abstract] | |
Period ending December 31, 2023 | $ 0 |
2024 | 280,000 |
2025 | 0 |
2026 | 50,000 |
2027 | 0 |
Thereafter | 275,000 |
Total | $ 605,000 |
2024 term loan, extension period | 6 months |
Number of extensions | Extension | 2 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Total credit facility, principal amount outstanding | $ 605,000 | $ 583,000 |
Fair Value (Schedule of Fair Va
Fair Value (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Derivative assets | $ 29,423 | $ 27,990 |
Recurring basis | ||
Assets: | ||
Derivative assets | 29,423 | 27,990 |
Total assets at fair value | 29,423 | 27,990 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis | ||
Assets: | ||
Derivative assets | 0 | 0 |
Total assets at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Recurring basis | ||
Assets: | ||
Derivative assets | 29,423 | 27,990 |
Total assets at fair value | 29,423 | 27,990 |
Significant Unobservable Inputs (Level 3) | Recurring basis | ||
Assets: | ||
Derivative assets | 0 | 0 |
Total assets at fair value | $ 0 | $ 0 |
Fair Value (Schedule of Fair _2
Fair Value (Schedule of Fair Value, Real Estate Assets Measured on Non-Recurring Basis) (Details) $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Estimated fair value | $ 1,885,261 | $ 1,880,082 | ||
In-place leases | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of intangible assets | $ 592 | $ 592 | $ 380 | |
Significant Unobservable Inputs (Level 3) | Comparable sale price per square foot | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Real estate assets, measurement input | 98.04 | |||
Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Estimated fair value | $ 22,278 | |||
Impairment loss on real estate | 5,978 | |||
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Estimated fair value | 0 | |||
Nonrecurring | Significant Other Observable Inputs (Level 2) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Estimated fair value | 20,726 | |||
Nonrecurring | Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Estimated fair value | $ 1,552 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Additional gain expected to be reclassified from AOCI into earnings during next twelve months | $ 17,453 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Schedule of the Notional Amount and Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Fair Value of Asset | $ 29,423 | $ 27,990 |
Interest rate swaps | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional Amount | 525,000 | 485,000 |
Interest rate swaps | Designated as Hedging Instrument | Other Assets | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Asset | $ 29,423 | $ 27,990 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities (Schedule of Income and Losses Recognized on Derivative Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other expenses, net | $ 5,630 | $ 5,498 | $ 16,769 | $ 17,942 |
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income Recognized in Other Comprehensive Income on Derivatives | 6,780 | 16,724 | 13,550 | 31,545 |
Interest rate swaps | Interest and other expenses, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income (Loss) Reclassified From Accumulated Other Comprehensive Income to Net Income | $ 4,465 | $ 379 | $ 12,117 | $ (2,912) |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 29,423 | $ 27,990 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Balance Sheet | 29,423 | 27,990 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | 0 | 0 |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 | 0 |
Net Amount | $ 29,423 | $ 27,990 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 07, 2023 | Oct. 06, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Stock [Line Items] | ||||||
Issuance of common stock under the distribution reinvestment plan | $ 18,675 | $ 18,594 | ||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock under the distribution reinvestment plan | $ 8 | $ 8 | $ 23 | $ 23 | ||
Repurchase of common stock (in shares) | 415,879 | 225,136 | 1,145,071 | 786,861 | ||
Repurchase of common stock | $ 4 | $ 2 | $ 11 | $ 8 | ||
Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Distributions paid | $ 7,777 | $ 7,518 | ||||
Cash | 5,706 | 5,502 | ||||
Issuance of common stock under the distribution reinvestment plan | 2,071 | 2,016 | ||||
Class A, I and T Shares | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Repurchase of common stock (in shares) | 1,145,071 | 786,861 | ||||
Repurchase of common stock | $ 9,376 | $ 6,452 | ||||
Repurchase of common stock, average price per share (in dollars per share) | $ 8.19 | $ 8.20 | ||||
Class A | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Repurchase of common stock (in shares) | 879,861 | 690,494 | ||||
Class A | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Distributions paid | 5,786 | 5,595 | ||||
Cash | 4,581 | 4,419 | ||||
Issuance of common stock under the distribution reinvestment plan | 1,205 | 1,176 | ||||
Class I | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Repurchase of common stock (in shares) | 102,570 | 20,905 | ||||
Class I | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Distributions paid | 575 | 555 | ||||
Cash | 346 | 333 | ||||
Issuance of common stock under the distribution reinvestment plan | 229 | 222 | ||||
Class T | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Repurchase of common stock (in shares) | 162,640 | 75,462 | ||||
Class T | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Distributions paid | 1,416 | 1,368 | ||||
Cash | 779 | 750 | ||||
Issuance of common stock under the distribution reinvestment plan | $ 637 | $ 618 |
Stockholders' Equity (Amounts R
Stockholders' Equity (Amounts Recognized in AOCI) (Details) - Unrealized Income (Loss) on Derivative Instruments - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance, beginning | $ 27,990 | $ (4,847) |
Other comprehensive income before reclassification | 13,550 | 31,545 |
Amount of (income) loss reclassified from accumulated other comprehensive income (loss) to net income | (12,117) | 2,912 |
Other comprehensive (loss) income | 1,433 | 34,457 |
Balance, ending | $ 29,423 | $ 29,610 |
Stockholders' Equity (Reclassif
Stockholders' Equity (Reclassifications Out of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expenses, net | $ 5,630 | $ 5,498 | $ 16,769 | $ 17,942 |
Interest rate swaps | (Income) Loss Amounts Reclassified from Accumulated Other Comprehensive Income to Net Income | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expenses, net | $ (12,117) | $ 2,912 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Diluted earnings per share outstanding adjustment (in shares) | 1,846 | 1,319 | 1,849 | 1,346 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,228 | $ 860 | $ 3,721 | $ 3,034 |
Time-Based Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 284,063 | |||
Award vesting period under plan | 4 years | |||
Performance -Based Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance period | 3 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Sep. 30, 2023 legalProceeding |
Commitments and Contingencies Disclosure [Abstract] | |
Number of pending legal proceedings to which the company is a party | 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Nov. 07, 2023 | Nov. 01, 2023 | Oct. 17, 2023 | Oct. 06, 2023 | Dec. 31, 2023 | Nov. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Subsequent Event [Line Items] | ||||||||||
Issuance of common stock under the distribution reinvestment plan | $ 18,675,000 | $ 18,594,000 | ||||||||
Distributions declared per common share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.30 | $ 0.30 | ||||||
Payments on credit facility | $ 28,000,000 | $ 745,000,000 | ||||||||
Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Cash | $ 5,706,000 | $ 5,502,000 | ||||||||
Issuance of common stock under the distribution reinvestment plan | 2,071,000 | 2,016,000 | ||||||||
Distributions paid | 7,777,000 | 7,518,000 | ||||||||
Payments on credit facility | $ 8,000,000 | |||||||||
Class A | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Cash | 4,581,000 | 4,419,000 | ||||||||
Issuance of common stock under the distribution reinvestment plan | 1,205,000 | 1,176,000 | ||||||||
Distributions paid | $ 5,786,000 | 5,595,000 | ||||||||
Distributions declared per common share (in dollars per share) | $ 0.00109589 | $ 0.00109589 | ||||||||
Annualized distribution per share (in dollars per share) | $ 0.40 | 0.40 | ||||||||
Class I | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Cash | $ 346,000 | 333,000 | ||||||||
Issuance of common stock under the distribution reinvestment plan | 229,000 | 222,000 | ||||||||
Distributions paid | $ 575,000 | 555,000 | ||||||||
Distributions declared per common share (in dollars per share) | $ 0.00109589 | 0.00109589 | ||||||||
Annualized distribution per share (in dollars per share) | $ 0.40 | 0.40 | ||||||||
Class T | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Cash | $ 779,000 | 750,000 | ||||||||
Issuance of common stock under the distribution reinvestment plan | 637,000 | 618,000 | ||||||||
Distributions paid | $ 1,416,000 | $ 1,368,000 | ||||||||
Distributions declared per common share (in dollars per share) | $ 0.00109589 | 0.00109589 | ||||||||
Annualized distribution per share (in dollars per share) | $ 0.40 | $ 0.40 | ||||||||
Class A, I and T shares | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of days, distribution calculation | 365 days | 365 days |