v3.25.4
Land, Buildings and Improvements, and Assets Held for Sale
 12 Months Ended
Dec. 31, 2025
Real Estate [Abstract]  
Land, Buildings and Improvements, and Assets Held for Sale Land, Buildings and Improvements, and Assets Held for Sale
Land, Buildings and Improvements — Net Lease and Other

Land and buildings leased to others, which are subject to operating leases, and real estate under construction, are summarized as follows (in thousands):
December 31,
20252024
Land$2,839,757 $2,398,409 
Buildings and improvements11,531,634 10,388,418 
Real estate under construction79,915 56,042 
Less: Accumulated depreciation(2,026,829)(1,701,892)
$12,424,477 $11,140,977 
During 2025, the U.S. dollar weakened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro increased by 13.1% to $1.1750 from $1.0389. As a result of this fluctuation in foreign currency exchange rates, the carrying value of our Land, buildings and improvements — net lease and other increased by $435.9 million from December 31, 2024 to December 31, 2025.

During the year ended December 31, 2025, we reclassified a portfolio of 26 properties classified as Land, buildings and improvements — net lease and other to Net investments in finance leases and loans receivable since we entered into an agreement to sell the properties to the tenant. As a result, the carrying value of our Land, buildings and improvements — net lease and other decreased by $121.0 million from December 31, 2024 to December 31, 2025 (Note 6). These properties were sold in June 2025.

During the year ended December 31, 2025, we reclassified a property classified as Land, buildings and improvements — net lease and other to Net investments in finance leases and loans receivable since we entered into an agreement to sell the property to the tenant. As a result, the carrying value of our Land, buildings and improvements — net lease and other decreased by $3.5 million from December 31, 2024 to December 31, 2025 (Note 6). This property was sold in July 2025.

On September 1, 2024, we entered into net lease agreements for certain self-storage properties previously classified as operating properties. On April 1, 2025, two of these net leases commenced; on July 1, 2025, one of these net leases commenced; and on August 1, 2025, one of these net leases commenced. As a result, on those dates, we reclassified four self-storage properties with an aggregate carrying value of $51.3 million from Land, buildings and improvements — operating properties to Land, buildings and improvements — net lease and other. Effective as of those times, we began recognizing lease revenues from these properties, whereas previously we recognized operating property revenues and expenses from these properties.

In connection with changes in lease classifications due to extensions of the underlying leases, we reclassified three properties with an aggregate carrying value of $15.0 million from Net investments in finance leases and loans receivable to Land, buildings and improvements — net lease and other during 2025 (Note 6).

Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements subject to operating leases was $331.1 million, $292.9 million, and $325.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Acquisitions of Real Estate During 2025

During 2025, we entered into the following investments, which were deemed to be real estate asset acquisitions (dollars in thousands):
Property Location(s)Number of PropertiesDate of AcquisitionProperty Type
Total Capitalized Costs (a)
Various, United States (a)
592/26/2025Industrial, Warehouse$136,022 
Various, United States (b)
43/3/2025Retail8,474 
Mishawaka, Indiana13/26/2025Specialty (Healthcare)31,762 
Various, Germany (3 properties) and La Garriga, Spain (c)
44/11/2025Industrial42,981 
Santa Fe Springs, California14/23/2025Warehouse128,043 
Various, Italy (7 properties) and Málaga and Burgos, Spain (c)
95/13/2025Industrial73,280 
Chattanooga, Tennessee16/16/2025Industrial20,247 
Newark, New Jersey and Boston, Massachusetts26/17/2025Industrial101,856 
San Francisco, California17/11/2025Industrial49,604 
Various, United States (d)
87/11/2025; 8/28/2025Retail15,796 
Loughborough and Ilkeston, United Kingdom (c)
27/16/2025Retail68,308 
Houston, Texas17/31/2025Industrial18,357 
Various, France (3 properties) and Medina del Campo, Spain (c)
47/31/2025Industrial56,388 
Various, Italy (c)
358/6/2025Industrial, Warehouse81,900 
Monterrey and San Juan del Rio, Mexico48/26/2025Industrial44,033 
Mesquite, Texas19/18/2025Industrial92,271 
Kissimmee, Florida19/23/2025Retail14,338 
Toronto and Markham, Canada; and Lee’s Summit, Missouri (c)
39/24/2025Industrial67,170 
Compton, California110/1/2025Warehouse5,937 
Various, United States (d)
410/2/2025Specialty (Healthcare)137,275 
San Juan del Rio, Mexico110/2/2025Industrial9,999 
Various, United States (e)
810/9/2025; 12/10/2025Retail15,986 
New Hartford, New York111/26/2025Retail (Car Wash)5,084 
Wasserburg am Inn, Germany (c)
112/16/2025Industrial27,142 
Cesena and Gela, Italy (c)
212/17/2025Industrial, Warehouse2,218 
Various, United States (f)
1012/18/2025Retail321,826 
Navarra and Zaragoza, Spain (c)
412/22/2025Warehouse80,020 
173$1,656,317 
__________
(a)This investment includes properties located across 13 U.S. states.
(b)This investment includes properties located across three U.S. states.
(c)Amount reflects the applicable exchange rate on the date of transaction.
(d)This investment includes properties located across four U.S. states.
(e)This investment includes properties located across five U.S. states.
(f)This investment includes properties located across nine U.S. states.
The aggregate purchase price allocation for investments disclosed above is as follows (dollars in thousands):
Total Capitalized Costs
Land$420,119 
Buildings and improvements995,255 
Intangible assets and liabilities:
In-place lease (weighted-average expected life of 16.0 years)
252,165 
Above-market rent (expected life of 15.5 years)
14,059 
Below-market rent (expected life of 5.7 years)
(3,061)
Right-of-use assets:
Land lease right-of-use assets2,296 
Below-market ground lease intangibles1,495 
Prepaid rent liabilities(23,715)
Operating lease liabilities(2,296)
$1,656,317 

Acquisitions of Real Estate During 2024 — We entered into 25 investments, which were deemed to be real estate asset acquisitions, at a total cost of $1.2 billion, including land of $219.4 million, buildings of $772.3 million, in-place lease intangibles of $166.1 million, above-market rent intangibles of $7.1 million, below-market rent intangibles of $0.4 million, land lease ROU assets of $4.3 million, below-market ground lease intangibles of $3.5 million, debt discount and deferred financing costs on non-recourse mortgage loans assumed of $4.2 million, and operating lease liabilities of $4.3 million.

Acquisitions of Real Estate During 2023 — We entered into 12 investments, which were deemed to be real estate asset acquisitions, at a total cost of $1.2 billion, including land of $212.6 million, buildings of $774.1 million, in-place lease intangibles of $185.9 million, ROU assets of $13.0 million, and prepaid rent liabilities of $6.9 million.

Real Estate Under Construction — Net Lease and Operating Properties

During 2025, we capitalized real estate under construction totaling $98.2 million. The number of construction projects in progress with balances included in real estate under construction was ten and four as of December 31, 2025 and 2024, respectively. Aggregate unfunded commitments totaled approximately $125.3 million and $72.1 million as of December 31, 2025 and 2024, respectively.

During 2025, we completed the following construction projects (dollars in thousands):
Property Location(s)Primary Transaction TypeNumber of PropertiesDate of CompletionProperty TypeTotal Capitalized Costs
Galeras, MexicoExpansion16/26/2025Industrial$4,843 
Bedford, MassachusettsRedevelopment17/22/2025Research and Development42,059 
Surprise, Arizona (a)
Build-to-Suit110/27/2025Industrial22,042 
3$68,944 
__________
(a)The tenant at this property commenced paying rent in January 2026.

During 2024, we completed five construction projects, at a total cost of $87.0 million.

During 2023, we completed four construction projects, at a total cost of $60.7 million.

During 2025, we committed to fund nine construction projects, for an aggregate amount of $157.0 million. We currently expect to complete the projects in 2026 and 2027.

Capitalized interest incurred during construction was $1.1 million, $1.0 million, and $0.6 million for the years ended December 31, 2025, 2024, and 2023 respectively, which reduces Interest expense in the consolidated statements of income.
Dispositions of Properties

During 2025, we sold 34 properties, which were classified as Land, buildings and improvements — net lease and other. As a result, the carrying value of our Land, buildings and improvements — net lease and other decreased by $300.3 million from December 31, 2024 to December 31, 2025 (Note 16).

Other Lease-Related Income

2025 — For the year ended December 31, 2025, Other lease-related income on our consolidated statements of income included: (i) lease termination income totaling $16.9 million and (ii) other lease-related settlements totaling $5.3 million.

2024 — For the year ended December 31, 2024, Other lease-related income on our consolidated statements of income included: (i) lease termination income totaling $7.0 million and (ii) other lease-related settlements totaling $11.8 million.

2023 — For the year ended December 31, 2023, Other lease-related income on our consolidated statements of income included: (i) lease termination income totaling $11.9 million received from two tenants in connection with the sales of the properties they occupied and (ii) other lease-related settlements totaling $9.1 million.

Leases

Operating Lease Income

Lease income related to operating leases recognized and included in the consolidated statements of income is as follows (in thousands):
Years Ended December 31,
202520242023
Lease income — fixed$1,313,926 $1,186,730 $1,254,340 
Lease income — variable (a)
165,278 145,058 173,036 
Total operating lease income$1,479,204 $1,331,788 $1,427,376 
__________
(a)Includes (i) rent increases based on changes in the CPI and other comparable indices and (ii) reimbursements for property taxes, insurance, and common area maintenance services.

Scheduled Future Lease Payments to be Received

Scheduled future lease payments to be received (exclusive of expenses paid by tenants, percentage of sales rents, and future CPI-based adjustments) under non-cancelable operating leases at December 31, 2025 are as follows (in thousands): 
Years Ending December 31, Total
2026$1,426,069 
20271,400,521 
20281,364,800 
20291,310,345 
20301,261,348 
Thereafter11,763,531 
Total$18,526,614 

See Note 6 for scheduled future lease payments to be received under non-cancelable direct financing leases and sales-type leases.
Lease Cost

Lease costs for operating leases are included in (i) General and administrative expenses (office leases), (ii) Property expenses, excluding reimbursable tenant costs (land leases), and (iii) Reimbursable tenant costs (land leases) in the consolidated statements of income. Certain information related to the total lease cost for operating leases is as follows (in thousands):
Years Ended December 31,
202520242023
Fixed lease cost
$16,359 $15,550 $15,518 
Variable lease cost
2,204 1,992 1,731 
Total lease cost$18,563 $17,542 $17,249 

During the years ended December 31, 2025, 2024, and 2023, we received sublease income totaling approximately $5.6 million, $5.0 million, and $4.9 million, respectively, which is included in Lease revenues in the consolidated statements of income.

Other Information

Supplemental balance sheet information related to ROU assets and lease liabilities is as follows (dollars in thousands):
December 31,
Location on Consolidated Balance Sheets20252024
Operating ROU assets — land leasesIn-place lease intangible assets and other$123,242 $115,156 
Finance ROU assets — land and building leasesIn-place lease intangible assets and other26,860 25,253 
Operating ROU assets — office leasesOther assets, net47,719 51,319 
Total operating ROU assets$197,821 $191,728 
Operating lease liabilitiesAccounts payable, accrued expenses and other liabilities$144,252 $143,274 
Weighted-average remaining lease term — operating leases23.8 years23.4 years
Weighted-average discount rate — operating leases6.9 %6.8 %
Number of land lease arrangements — operating leases7172
Weighted-average remaining lease term — finance leases (a)
57.8 years56.4 years
Number of land and building lease arrangements — finance leases32
Number of office space arrangements44
Remaining lease term range (excluding extension options not reasonably certain of being exercised)
<1 – 94 years
<1 – 95 years
__________
(a)There are no related lease liabilities for our finance ROU assets. Therefore, there is no applicable weighted-average discount rate for such assets.

Cash paid for operating lease liabilities included in Net cash provided by operating activities totaled $17.3 million, $16.2 million, and $16.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Undiscounted Cash Flows

A reconciliation of the undiscounted cash flows for operating leases recorded on the consolidated balance sheet within Accounts payable, accrued expenses and other liabilities as of December 31, 2025 is as follows (in thousands):
Years Ending December 31, Total
2026$15,361 
202715,947 
202815,849 
202914,927 
203014,398 
Thereafter234,536 
Total lease payments311,018 
Less: amount of lease payments representing interest(166,766)
Present value of future lease payments/lease obligations$144,252 

Land, Buildings and Improvements — Operating Properties

At December 31, 2025, Land, buildings and improvements — operating properties consisted of our investments in 11 self-storage properties, four hotels, and one student housing property. At December 31, 2024, Land, buildings and improvements — operating properties consisted of our investments in 78 self-storage properties, four hotels, and two student housing properties. Below is a summary of our Land, buildings and improvements — operating properties (in thousands): 
December 31,
20252024
Land$25,665 $144,871 
Buildings and improvements260,414 1,053,805 
Less: Accumulated depreciation(59,626)(100,575)
$226,453 $1,098,101 

During the year ended December 31, 2025, the U.S. dollar weakened against the British pound sterling, resulting in an increase of $7.0 million in the carrying value of our Land, buildings and improvements — operating properties from December 31, 2024 to December 31, 2025.

As described above under Land, Buildings and Improvements — Net Lease and Other, on September 1, 2024, we entered into net lease agreements for certain self-storage properties previously classified as operating properties. On April 1, 2025, two of these net leases commenced; on July 1, 2025, one of these net leases commenced; and on August 1, 2025, one of these net leases commenced. As a result, on those dates, we reclassified four self-storage properties with an aggregate carrying value of $51.3 million from Land, buildings and improvements — operating properties to Land, buildings and improvements — net lease and other. Effective as of those times, we began recognizing lease revenues from these properties, whereas previously we recognized operating property revenues and expenses from these properties.

Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements attributable to operating properties was $22.5 million, $28.7 million, and $29.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Dispositions of Properties

During the year ended December 31, 2025, we sold 63 self-storage operating properties and one student housing operating property, which were classified as Land, buildings and improvements — operating properties. As a result, the carrying value of our Land, buildings and improvements — operating properties decreased by $802.1 million from December 31, 2024 to December 31, 2025 (Note 16).
Acquisitions of Operating Real Estate During 2024 — We entered into one self-storage operating property investment, which was deemed to be a real estate asset acquisition, at a cost of $7.4 million, including land of $1.7 million, buildings of $5.3 million, and in-place lease intangibles of $0.4 million.

Acquisitions of Operating Real Estate During 2023 — We entered into four self-storage operating property investments, which were deemed to be real estate asset acquisitions, at a total cost of $47.3 million, including land of $13.5 million, buildings of $31.9 million, and in-place lease intangibles of $1.8 million.

For the year ended December 31, 2025, Land, buildings and improvements — operating properties revenues totaling $112.5 million were comprised of $103.9 million in lease revenues and $8.6 million in other income (such as food and beverage revenue) from 78 consolidated self-storage properties, four consolidated hotels, and two consolidated student housing properties. For the year ended December 31, 2024, Land, buildings and improvements — operating properties revenues totaling $146.8 million were comprised of $136.5 million in lease revenues and $10.3 million in other income (such as food and beverage revenue) from 81 consolidated self-storage properties, five consolidated hotels, and two consolidated student housing properties. For the year ended December 31, 2023, Land, buildings and improvements — operating properties revenues totaling $180.3 million were comprised of $164.5 million in lease revenues and $15.8 million in other income from 80 consolidated self-storage properties, 13 consolidated hotels, and two consolidated student housing properties. We derive self-storage revenue primarily from rents received from customers who rent storage space under month-to-month leases for personal or business use. We derive hotel revenue primarily from room rentals, as well as food, beverage, and other services. We earn student housing operating revenue primarily from leases of one year or less with individual students.

Assets Held for Sale, Net

Below is a summary of our properties held for sale (in thousands):
December 31,
20252024
Land, buildings and improvements — net lease and other
$3,741 $— 
Accumulated depreciation and amortization(414)— 
Assets held for sale, net$3,327 $— 

At December 31, 2025, we had one property classified as Assets held for sale, net, with an aggregate carrying value of $3.3 million. This property was sold in January 2026 (Note 18).