v3.26.1
Land, Buildings and Improvements, and Assets Held for Sale
 6 Months Ended
Jun. 30, 2026
Property, Plant, and Equipment [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):
June 30, 2026December 31, 2025
Land$3,197,296 $2,839,757 
Buildings and improvements11,982,742 11,531,634 
Real estate under construction42,829 79,915 
Less: Accumulated depreciation(2,097,308)(2,026,829)
$13,125,559 $12,424,477 

As a result of foreign currency exchange rate fluctuations during the six months ended June 30, 2026 (primarily the U.S. dollar strengthening against the euro), there was a decrease of $139.4 million in the carrying value of Land, buildings and improvements — net lease and other from December 31, 2025 to June 30, 2026.
During the six months ended June 30, 2026, 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 $6.3 million from December 31, 2025 to June 30, 2026 (Note 5). This property was sold in March 2026.

During the six months ended June 30, 2026, we reclassified one property with a carrying value of $35.5 million from Net investments in finance leases and loans receivable to Land, buildings and improvements — net lease and other in connection with a change in lease classification due to an extension of the underlying lease (Note 5).

Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements subject to operating leases was $83.5 million and $77.4 million for the three months ended June 30, 2026 and 2025, respectively, and $176.1 million and $152.7 million for the six months ended June 30, 2026 and 2025, respectively.

Acquisitions of Real Estate

During the six months ended June 30, 2026, 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 TypeTotal Capitalized Costs
Las Vegas, New Mexico11/13/2026Retail $2,195 
Arlington Heights, Illinois11/15/2026Industrial 9,432 
Various, Poland (a)
81/28/2026; 2/18/2026Warehouse201,789 
Solon, Ohio11/29/2026Warehouse 43,387 
Various, Canada (a)
143/10/2026Retail 211,883 
Bahlingen am Kaiserstuhl, Germany (a)
13/10/2026Industrial 23,621 
Eden, North Carolina14/2/2026Industrial 12,729 
Akron, Ohio14/27/2026Specialty (Healthcare)27,165 
Various, Germany (a)
44/29/2026Industrial 51,842 
Various, United States (b)
435/8/2026Industrial 400,188 
Various, Lithuania (12 properties), Latvia (4 properties), and Estonia (3 properties) (a) (c)
195/20/2026Retail; Warehouse 206,591 
Murcia, Spain (a) (d)
25/26/2026Warehouse 33,926 
Bloomfield, New Mexico26/9/2026Retail 3,766 
Tulsa, Oklahoma16/30/2026Warehouse 74,710 
99$1,303,224 
__________
(a)Amount reflects the applicable exchange rate on the date of transaction.
(b)This investment includes properties located across 24 U.S. states.
(c)We acquired these properties from a jointly owned investment in which we own a 70% interest and account for as an equity method investment (Note 7). In connection with this acquisition, we assumed a non-recourse mortgage loan encumbering the properties with an outstanding principal balance of $97.8 million (Note 7, Note 10)
(d)We entered into a purchase agreement to acquire an additional industrial facility leased to this tenant for $37.5 million, which is expected to be completed in 2027.
The aggregate purchase price allocation for investments disclosed above is as follows (dollars in thousands):
Total Capitalized Costs
Land$421,871 
Buildings and improvements665,535 
Intangible assets:
In-place lease (weighted-average expected life of 16.3 years)
210,068 
Above-market rent (expected life of 12.1 years)
114 
Below-market rent (expected life of 12.4 years)
(2,017)
Right-of-use assets:
Land lease right-of-use assets335 
Below-market ground lease intangibles (weighted-average expected life of 39.7 years)
7,653 
Right-of-use liabilities:
Land lease right-of-use liabilities(335)
$1,303,224 

Real Estate Under Construction — Net Lease and Operating Properties

During the six months ended June 30, 2026, we capitalized real estate under construction totaling $48.3 million. The number of construction projects in progress with balances included in real estate under construction was seven and ten as of June 30, 2026 and December 31, 2025, respectively. Aggregate unfunded commitments totaled approximately $90.0 million and $125.3 million as of June 30, 2026 and December 31, 2025, respectively.

During the six months ended June 30, 2026, we completed the following construction projects (dollars in thousands):
Property Location(s)Primary Transaction TypeNumber of PropertiesProperty TypeTotal Capitalized Costs
Surprise, ArizonaBuild-to-Suit1Retail$12,175 
Oskarshamn, Sweden (a)
Build-to-Suit1Warehouse18,449 
Billings, MontanaBuild-to-Suit1Education (Medical School)25,825 
Overland Park, KansasExpansion1Specialty (Healthcare)9,922 
4$66,371 
__________
(a)Amount reflects the applicable exchange rate on the date of transaction.

During the six months ended June 30, 2026, we committed to fund one construction project for approximately $13.3 million. We currently expect to complete this project in 2027.

Capitalized interest incurred during construction was $0.3 million for both the three months ended June 30, 2026 and 2025, and $0.8 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively, which reduces Interest expense in the consolidated statements of income.

Dispositions of Properties

During the six months ended June 30, 2026, we sold 14 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 $115.9 million from December 31, 2025 to June 30, 2026 (Note 14).
Other Lease-Related Income

2026 — For the three and six months ended June 30, 2026, other lease-related income on our consolidated statements of income included: (i) lease termination income of $7.1 million and $15.0 million, respectively, and (ii) other lease-related settlements totaling $3.6 million and $5.6 million, respectively.

2025 — For the three and six months ended June 30, 2025, other lease-related income on our consolidated statements of income included: (i) lease termination income of $5.7 million and $7.5 million, respectively, and (ii) other lease-related settlements totaling $3.4 million and $4.4 million, respectively.

Leases

Operating Lease Income

Lease income related to operating leases recognized and included in the consolidated statements of income is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Lease income — fixed
$363,146 $322,188 $721,149 $636,272 
Lease income — variable (a)
46,515 42,007 91,343 81,691 
Total operating lease income$409,661 $364,195 $812,492 $717,963 
__________
(a)Includes (i) rent increases based on changes in the U.S. Consumer Price Index (CPI) and other comparable indices and (ii) reimbursements for property taxes, insurance, and common area maintenance services.

Land, Buildings and Improvements — Operating Properties

At June 30, 2026, Land, buildings and improvements — operating properties consisted of our investments in four hotels and one student housing property. 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. Below is a summary of our Land, buildings and improvements — operating properties (in thousands):
June 30, 2026December 31, 2025
Land$16,405 $25,665 
Buildings and improvements165,289 260,414 
Less: Accumulated depreciation(53,426)(59,626)
$128,268 $226,453 

During the six months ended June 30, 2026, we recognized an impairment charge on our student housing operating property, which reduced the carrying value of (i) Land, buildings and improvements — operating properties by $46.7 million and (ii) In-place lease intangible assets and other by $3.4 million (Note 8). In addition, during the six months ended June 30, 2026, the U.S. dollar strengthened against the British pound sterling, resulting in a decrease of $1.8 million in the carrying value of our Land, buildings and improvements — operating properties from December 31, 2025 to June 30, 2026.

Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements attributable to operating properties was $1.5 million and $6.8 million for the three months ended June 30, 2026 and 2025, respectively, and $3.3 million and $13.8 million for the six months ended June 30, 2026 and 2025, respectively.
Dispositions of Properties

During the six months ended June 30, 2026, we sold our 11 remaining self-storage operating properties, 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 $47.3 million from December 31, 2025 to June 30, 2026 (Note 14).
Assets Held for Sale, Net

Below is a summary of our properties held for sale (in thousands):
June 30, 2026December 31, 2025
Land, buildings and improvements — net lease and other
$11,787 $3,741 
In-place lease intangible assets and other7,301 — 
Above-market rent intangible assets1,922 — 
Accumulated depreciation and amortization(10,569)(414)
Assets held for sale, net$10,441 $3,327 

At both June 30, 2026 and December 31, 2025, we had one property classified as Assets held for sale, net, with an aggregate carrying value of $10.4 million and $3.3 million, respectively. The property held for sale at December 31, 2025 was sold in January 2026.