v3.26.1
Real Estate
6 Months Ended
Jun. 30, 2026
Acquisition And Disposition Of Properties And Discontinued Operations [Abstract]  
Real Estate

2. Real Estate

The Company’s consolidated real estate is comprised of the following for the periods presented (in thousands):

 

 

 

June 30,
2026

 

 

December 31,
2025

 

Buildings and improvements

 

$

3,089,483

 

 

$

3,421,366

 

Tenant improvements

 

 

324,002

 

 

 

339,414

 

Land

 

 

1,176,836

 

 

 

1,147,236

 

Construction in progress

 

 

30,564

 

 

 

32,969

 

Right-of-use assets - finance leases (Note 11)

 

 

61,366

 

 

 

61,366

 

Total

 

 

4,682,251

 

 

 

5,002,351

 

Less: Accumulated depreciation and amortization

 

 

(1,004,812

)

 

 

(1,018,597

)

Operating real estate, net

 

 

3,677,439

 

 

 

3,983,754

 

Real estate under development

 

 

194,222

 

 

 

167,051

 

Net investments in real estate

 

$

3,871,661

 

 

$

4,150,805

 

 

Acquisitions

 

During the six months ended June 30, 2026, the Company acquired the following consolidated REIT Portfolio retail properties (dollars in thousands):

Property and Location

 

Percent
Acquired

 

Date of
Acquisition

 

Purchase
Price
(a)

 

2026 REIT Portfolio Acquisitions

 

 

 

 

 

 

 

1045 and 1165 Madison Avenue - New York, NY

 

100%

 

January 29, 2026

 

$

21,313

 

Rhode Island Place - Washington, D.C.

 

100%

 

March 4, 2026

 

 

9,464

 

846 W. Armitage Avenue - Chicago, IL

 

100%

 

March 5, 2026

 

 

4,440

 

225 Worth Avenue - Palm Beach, FL

 

100%

 

March 27, 2026

 

 

43,469

 

4-6 Newbury Street and 28 Newbury Street - Boston, MA

 

100%

 

April 10, 2026

 

 

110,154

 

129 5th Avenue - New York, NY

 

100%

 

June 15, 2026

 

 

9,599

 

Total 2026 REIT Portfolio Acquisitions

 

 

 

 

 

$

198,439

 

(a)
Cumulative purchase price includes capitalized transaction costs of $3.1 million.

 

For acquisitions completed during the period, the Company recorded identifiable intangible assets and intangible liabilities in the aggregate of approximately $20.5 million and $13.9 million, respectively. These intangibles are amortized over the remaining lease terms of the related leases, which ranged from approximately 1 to 50 years as of the respective acquisition dates. Refer to Note 6 for additional detail on the Company’s amortization of intangible assets and liabilities.

 

The Company determines the fair value of the individual components of real estate asset acquisitions primarily through calculating the “as-if vacant” value of a building, using an income approach, which relies significantly upon internally determined assumptions. The Company has determined that these estimates primarily rely on Level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the “as-if vacant” value for acquisition activity during 2026 are as follows:

 

 

 

2026

 

 

 

Low

 

High

 

Exit Capitalization Rate

 

 

5.00

%

 

6.75

%

Discount Rate

 

 

6.25

%

 

8.50

%

Annual net rental rate per square foot on acquired buildings

 

$

10.50

 

$

500.00

 

Annual net rental rate per square foot on acquired master lease

 

$

4.71

 

$

23.83

 

 

 

Dispositions

 

During the second quarter of 2026, the Company recognized a gain on disposition of properties of $4.0 million primarily related to the disposition of New Towne Center, a consolidated Fund V Investment Management property located in Canton, Michigan. During the first quarter of 2026, the Company recognized a gain on disposition of properties of $142.1 million primarily related to:

the disposition of Landstown Commons, a consolidated Fund V Investment Management property located in Virginia Beach, Virginia and 1964 Union Street, a consolidated Fund IV Investment Management property located in San Francisco, California;
the sale of a seven-property open-air retail portfolio, including six Fund V properties and one wholly owned asset, to newly formed unconsolidated joint ventures in which the Company retained a 20% ownership interest, which was fair-valued at $87.1 million. Upon deconsolidation, the Company recognized a gain on disposition at the transaction level of $112.3 million, of which the Company’s proportionate share was $22.1 million. The Company repaid $210.5 million of consolidated Investment Management property mortgage loans using proceeds from the recapitalization (Note 7).
the sale of the Pinewood Square property, an open-air retail center located in Lake Worth, Florida, to a newly formed unconsolidated joint venture for $68.4 million and retained a 20% ownership interest, which was fair-valued at $13.6 million (Note 4). Upon deconsolidation, the Company recognized a gain on disposition of $4.1 million.

 

Properties Held for Sale

As of June 30, 2026, the Company classified the parking garage at 1035 Third Avenue in New York, New York, a consolidated Fund IV Investment Management property, as held for sale. The disposition was completed in July 2026 (Note 16). No properties were classified as held for sale as of December 31, 2025.

 

The assets of the property held for sale are presented separately in the accompanying condensed consolidated balance sheets and are summarized as follows:

 

 

 

June 30,

 

 

 

2026

 

Assets

 

 

 

Building and improvements

 

$

5,365

 

Land

 

 

2,521

 

Less: Accumulated depreciation and amortization

 

 

(1,844

)

Other

 

 

793

 

 

 

$

6,835

 

 

Real Estate Under Development

Real estate under development represents the Company’s consolidated properties that have not yet been placed into service and are undergoing substantial development or construction.

Development activity for these properties during the periods presented is summarized below (dollars in thousands):

 

 

 

January 1, 2026

 

 

Six Months Ended June 30, 2026

 

 

June 30, 2026

 

 

 

Number of
Properties

 

 

Carrying
Value

 

 

Transfers In

 

 

Capitalized
Costs
 (a)

 

 

Transfers Out

 

 

Number of
Properties

 

 

Carrying
Value

 

REIT Portfolio

 

 

13

 

 

$

167,051

 

 

$

 

 

$

27,171

 

 

$

 

 

 

13

 

 

 

194,222

 

Total

 

 

13

 

 

$

167,051

 

 

$

 

 

$

27,171

 

 

$

 

 

 

13

 

 

$

194,222

 

(a)
Includes construction in progress at operating properties that remain in service during the construction period.

 

The number of properties in the table above refers to full-property development projects; however, certain projects represent only a portion of a property, and the capitalized costs and carrying value of these projects are included in the table above. As of June 30, 2026, consolidated REIT Portfolio development projects included 13 properties in the Henderson Avenue Portfolio.