v3.26.1
Acquired Intangible Assets and Liabilities
 6 Months Ended
Jun. 30, 2026
Acquired Intangible Assets and Liabilities Disclosure [Abstract]  
Acquired Intangible Assets and Liabilities

NOTE 5 – ACQUIRED INTANGIBLE ASSETS AND LIABILITIES

The following table summarizes the Company’s identified intangible assets and liabilities as of June 30, 2026 and December 31, 2025:

 

 

June 30, 2026

 

 

December 31, 2025

 

Intangible assets:

 

 

 

 

 

 

Acquired in-place lease value

 

$

33,155

 

 

$

—

 

Acquired above-market lease value

 

 

7,228

 

 

 

—

 

Accumulated amortization

 

 

(1,984

)

 

 

—

 

Acquired lease intangible assets, net

 

$

38,399

 

 

$

—

 

Intangible liabilities:

 

 

 

 

 

 

Acquired below-market lease value

 

$

(13,219

)

 

$

—

 

Accumulated amortization

 

 

93

 

 

 

—

 

Acquired lease intangible liabilities, net

 

$

(13,126

)

 

$

—

 

The portion of the purchase price allocated to acquired above-market lease value and acquired below-market lease value is amortized on a straight-line basis over the term of the related lease as an adjustment to rental revenue. For below-market lease values, the amortization period includes any renewal periods with below-market fixed rate renewals. The portion of the purchase price allocated to acquired in-place lease value is amortized on a straight-line basis over the acquired leases’ weighted average remaining term.

The following table summarizes the Company’s ground lease intangibles as of June 30, 2026 and December 31, 2025:

 

 

June 30, 2026

 

 

December 31, 2025

 

 

 

 

 

 

 

 

Acquired below-market ground lease intangibles, operating leases

 

$

3,938

 

 

$

—

 

Accumulated amortization

 

 

(10

)

 

 

—

 

Acquired below-market ground lease intangibles, net

 

$

3,928

 

 

$

—

 

 

 

 

 

 

 

 

Acquired above-market ground lease intangibles, finance lease

 

$

66

 

 

$

—

 

Accumulated amortization

 

 

—

 

 

 

—

 

Acquired above-market ground lease intangibles, net

 

$

66

 

 

$

—

 

 

Acquired below-market ground lease intangibles, net are included within operating lease right-of-use assets, net and acquired above-market ground lease intangibles, net are included within finance lease right-of-use asset, net in the consolidated balance sheet. The portion of the purchase price allocated to above- and below-market ground lease intangibles is amortized on a straight-line basis over the term of the related lease as an adjustment to property operating expenses.

Amortization pertaining to acquired in-place lease value, above-/below-market ground leases and above-/below-market lease values is summarized below:

 

 

Three Months
Ended June 30,

 

 

Six Months
Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Amortization recorded as amortization expense:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired in-place lease value

 

$

1,812

 

 

$

—

 

 

$

1,812

 

 

$

—

 

Amortization recorded as a (reduction) increase to property
   operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Above-market ground lease, finance lease

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Below-market ground leases, operating leases

 

 

10

 

 

 

—

 

 

 

10

 

 

 

—

 

Net property operating expense increase

 

$

10

 

 

$

—

 

 

$

10

 

 

$

—

 

Amortization recorded as a (reduction) increase to rental
   revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired above-market leases

 

$

(172

)

 

$

—

 

 

$

(172

)

 

$

—

 

Acquired below-market leases

 

 

93

 

 

 

—

 

 

 

93

 

 

 

—

 

Net rental revenue reduction

 

$

(79

)

 

$

—

 

 

$

(79

)

 

$

—

 

Estimated amortization of the respective intangible lease assets and liabilities as of June 30, 2026 for each of the five succeeding years and thereafter is as follows:

 

 

Acquired
In-Place
Leases

 

 

Above-
Market
Leases

 

 

Below-
Market
Leases

 

 

Above-
Market Ground
Lease

 

 

Below-
Market Ground
Leases

 

2026 (remainder of the year)

 

 

4,353

 

 

 

517

 

 

 

(280

)

 

 

(1

)

 

 

29

 

2027

 

 

4,381

 

 

 

1,033

 

 

 

(560

)

 

 

(1

)

 

 

57

 

2028

 

 

3,762

 

 

 

975

 

 

 

(552

)

 

 

(1

)

 

 

57

 

2029

 

 

3,341

 

 

 

955

 

 

 

(539

)

 

 

(1

)

 

 

57

 

2030

 

 

2,981

 

 

 

893

 

 

 

(539

)

 

 

(1

)

 

 

57

 

Thereafter

 

 

12,525

 

 

 

2,683

 

 

 

(10,656

)

 

 

(61

)

 

 

3,671

 

Total

 

$

31,343

 

 

$

7,056

 

 

$

(13,126

)

 

$

(66

)

 

$

3,928