Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 06, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-52596 | |
Entity Registrant Name | ARES REAL ESTATE INCOME TRUST INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 30-0309068 | |
Entity Address, Address Line One | One Tabor Center, 1200 Seventeenth Street, Suite 2900 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 303 | |
Local Phone Number | 228-2200 | |
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 | |
Entity Central Index Key | 0001327978 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class T | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 28,330,773 | |
Class S | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 47,187,846 | |
Class D | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,618,607 | |
Class I | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 62,880,899 | |
Class E | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 46,143,716 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Net investment in real estate properties | $ 3,866,890 | $ 3,889,314 |
Investments in unconsolidated joint venture partnerships (includes $34,092 and $0 at fair value as of March 31, 2024 and December 31, 2023, respectively) | 189,273 | 153,305 |
Investments in real estate debt and securities (includes $128,667 and $122,375 at fair value as of March 31, 2024 and December 31, 2023, respectively) | 391,442 | 370,176 |
Cash and cash equivalents | 15,739 | 15,052 |
Restricted cash | 4,184 | 4,614 |
DST Program Loans (includes $19,914 and $7,753 at fair value as of March 31, 2024 and December 31, 2023, respectively) | 123,182 | 117,019 |
Other assets | 90,957 | 89,926 |
Total assets | 4,681,667 | 4,639,406 |
Liabilities | ||
Accounts payable and accrued expenses | 64,785 | 66,386 |
Debt, net | 1,951,690 | 1,961,120 |
Intangible lease liabilities, net | 36,053 | 37,079 |
Financing obligations, net (includes $241,374 and $102,045 at fair value as of March 31, 2024 and December 31, 2023, respectively) | 1,410,199 | 1,351,090 |
Distribution fees payable to affiliates | 64,217 | 66,656 |
Other liabilities | 32,949 | 33,913 |
Total liabilities | 3,559,893 | 3,516,244 |
Commitments and contingencies (Note 14) | ||
Redeemable noncontrolling interests | 11,315 | 11,746 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value-200,000 shares authorized, none issued and outstanding | ||
Additional paid-in capital | 1,897,776 | 1,895,789 |
Distributions in excess of earnings | (1,142,075) | (1,108,823) |
Accumulated other comprehensive income | 9,430 | 6,359 |
Total stockholders' equity | 767,077 | 795,297 |
Noncontrolling interests | 343,382 | 316,119 |
Total equity | 1,110,459 | 1,111,416 |
Total liabilities and equity | 4,681,667 | 4,639,406 |
Class T | ||
Stockholders' equity: | ||
Common stock | 284 | 284 |
Class S | ||
Stockholders' equity: | ||
Common stock | 476 | 482 |
Class D | ||
Stockholders' equity: | ||
Common stock | 69 | 69 |
Class I | ||
Stockholders' equity: | ||
Common stock | 645 | 655 |
Class E | ||
Stockholders' equity: | ||
Common stock | $ 472 | $ 482 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Investments in unconsolidated joint venture partnerships | $ 34,092 | $ 0 |
Investments in real estate debt and securities at fair value | 128,667 | 122,375 |
DST Program Loans | 19,914 | 7,753 |
Financing obligations at fair value | $ 241,374 | $ 102,045 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 200,000 | 200,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class T | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 28,402 | 28,432 |
Common stock, shares outstanding (in shares) | 28,402 | 28,432 |
Class S | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 47,591 | 48,145 |
Common stock, shares outstanding (in shares) | 47,591 | 48,145 |
Class D | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 6,875 | 6,930 |
Common stock, shares outstanding (in shares) | 6,875 | 6,930 |
Class I | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 64,462 | 65,511 |
Common stock, shares outstanding (in shares) | 64,462 | 65,511 |
Class E | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000 | 500,000 |
Common stock, shares issued (in shares) | 47,155 | 48,210 |
Common stock, shares outstanding (in shares) | 47,155 | 48,210 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Rental revenues | $ 88,131 | $ 77,960 |
Debt-related income | 11,311 | 5,761 |
Total revenues | 99,442 | 83,721 |
Operating expenses: | ||
Rental expenses | 32,500 | 28,300 |
Real estate-related depreciation and amortization | 35,470 | 33,197 |
General and administrative expenses | 3,337 | 3,044 |
Advisory fees | 9,972 | 9,538 |
Acquisition costs and reimbursements | 2,043 | 1,169 |
Valuation allowance on debt-related investment | 0 | 2,520 |
Total operating expenses | 83,322 | 77,768 |
Other income (expenses): | ||
Income (loss) from unconsolidated joint venture partnerships | 2,282 | (2,446) |
Interest expense | (44,234) | (37,545) |
Gain on sale of real estate property | 0 | 36,884 |
Unrealized gain on financing obligations | 2,821 | 0 |
Loss on extinguishment of debt and financing commitments, net | 0 | (700) |
Loss on derivative instruments | (103) | |
Provision for current expected credit losses | 133 | (5,630) |
Other income and expenses | 1,289 | 1,016 |
Total other income (expenses) | (37,709) | (8,524) |
Net loss | (21,589) | (2,571) |
Net loss attributable to redeemable noncontrolling interests | 111 | 18 |
Net loss attributable to noncontrolling interests | 6,477 | 549 |
Net loss attributable to common stockholders | $ (15,001) | $ (2,004) |
Weighted average number of common shares outstanding | ||
Weighted-average shares outstanding-basic (in shares) | 195,679 | 206,774 |
Weighted-average shares outstanding-diluted (in shares) | 281,373 | 263,026 |
Net loss attributable to common stockholders per common share - basic | $ (0.08) | $ (0.01) |
Net loss attributable to common stockholders per common share - diluted | $ (0.08) | $ (0.01) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net loss | $ (21,589) | $ (2,571) |
Change from cash flow hedging activities | 4,769 | (7,056) |
Change from activities related to available-for-sale debt securities | (14) | 77 |
Comprehensive loss | (16,834) | (9,550) |
Comprehensive loss attributable to redeemable noncontrolling interests | 5,053 | 73 |
Comprehensive loss attributable to noncontrolling interests | 87 | 2,222 |
Comprehensive loss attributable to common stockholders | $ (11,694) | $ (7,255) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Distributions in Excess of Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Beginning Balances at Dec. 31, 2022 | $ 2,061 | $ 1,898,510 | $ (973,395) | $ 16,083 | $ 250,608 | $ 1,193,867 |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 206,108 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss (excludes portion attributable to redeemable noncontrolling interests) | (2,004) | (549) | (2,553) | |||
Change from securities and cash flow hedging activities (excludes amount attributable to redeemable noncontrolling interests) | (5,251) | (1,673) | (6,924) | |||
Issuance of common stock | $ 54 | 47,637 | 47,691 | |||
Issuance of common stock (in shares) | 5,366 | |||||
Share-based compensation | 75 | 75 | ||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (1,437) | (1,437) | ||||
Trailing distribution fees | (793) | 1,461 | 1,132 | 1,800 | ||
Redemptions of common stock | $ (40) | (35,415) | $ (35,455) | |||
Redemptions of common stock (in shares) | (4,026) | (4,026) | ||||
Other noncontrolling interests net contributions/distributions | (4) | $ (4) | ||||
Distributions declared (excludes distributions attributable to redeemable noncontrolling interests) | (19,382) | (5,079) | (24,461) | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | 74 | 74 | ||||
Redemptions of noncontrolling interests | (2,170) | (8,760) | (10,930) | |||
Reallocation of stockholders' equity and noncontrolling interests | (2,427) | (204) | 2,631 | |||
Ending Balances at Mar. 31, 2023 | $ 2,075 | 1,904,054 | (993,320) | 10,628 | 238,306 | 1,161,743 |
Balance at end of period (in shares) at Mar. 31, 2023 | 207,448 | |||||
Beginning Balances at Dec. 31, 2023 | $ 1,972 | 1,895,789 | (1,108,823) | 6,359 | 316,119 | 1,111,416 |
Balance at beginning of period (in shares) at Dec. 31, 2023 | 197,228 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss (excludes portion attributable to redeemable noncontrolling interests) | (15,001) | (6,477) | (21,478) | |||
Change from securities and cash flow hedging activities (excludes amount attributable to redeemable noncontrolling interests) | 3,307 | 1,424 | 4,731 | |||
Issuance of common stock | $ 21 | 16,433 | $ 16,454 | |||
Issuance of common stock (in shares) | 2,029 | 2,000 | ||||
Share-based compensation | 75 | $ 75 | ||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (1,267) | (1,267) | ||||
Trailing distribution fees | 278 | 1,317 | 844 | 2,439 | ||
Redemptions of common stock | $ (47) | (38,302) | $ (38,349) | |||
Redemptions of common stock (in shares) | (4,772) | (4,772) | ||||
Issuances of OP Units for DST Interests | 72,034 | $ 72,034 | ||||
Other noncontrolling interests net contributions/distributions | 279 | 279 | ||||
Distributions declared (excludes distributions attributable to redeemable noncontrolling interests) | (19,568) | (8,433) | (28,001) | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | 200 | 200 | ||||
Redemptions of noncontrolling interests | (8,074) | (8,074) | ||||
Reallocation of stockholders' equity and noncontrolling interests | 24,570 | (236) | (24,334) | |||
Ending Balances at Mar. 31, 2024 | $ 1,946 | $ 1,897,776 | $ (1,142,075) | $ 9,430 | $ 343,382 | $ 1,110,459 |
Balance at end of period (in shares) at Mar. 31, 2024 | 194,485 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY | ||
Net loss attributable to redeemable noncontrolling interests | $ (111) | $ (18) |
Unrealized gain (loss) from derivative instruments allocated to redeemable noncontrolling interest | 24 | (55) |
Distribution fees attributable to redeemable noncontrolling interest | $ 144 | $ 192 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net loss | $ (21,589) | $ (2,571) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Real estate-related depreciation and amortization | 35,470 | 33,197 |
Straight-line rent and amortization of above- and below-market leases | (2,375) | (1,896) |
Gain on sale of real estate property | 0 | (36,884) |
Valuation allowance on debt-related investment | 0 | 2,520 |
(Income) loss from unconsolidated joint venture partnerships | (2,282) | 2,446 |
Loss on extinguishment of debt and financing commitments, net | 0 | 700 |
Provision for current expected credit losses | (133) | 5,630 |
Amortization of deferred financing costs | 2,433 | 1,960 |
(Decrease) increase in financing obligation liability appreciation | (69) | 2,862 |
Unrealized gain on financing obligations | (2,821) | 0 |
Unrealized loss on derivative instruments not designated as cash flow hedges | 0 | 1,224 |
Paid-in-kind interest on investments in real estate debt and securities | (5,808) | (318) |
Distributions of earnings from unconsolidated joint venture partnerships | 236 | 433 |
Amortization of interest rate cap premiums | 3,381 | 418 |
Other | 88 | (416) |
Changes in operating assets and liabilities | ||
Other assets, accounts payable and accrued expenses and other liabilities | 1,261 | (1,331) |
Cash settlement of accrued performance participation allocation | 0 | (23,747) |
Net cash provided by (used in) operating activities | 7,792 | (15,773) |
Investing activities: | ||
Real estate acquisitions | 0 | (14,697) |
Capital expenditures | (13,322) | (12,837) |
Proceeds from disposition of real estate property | 0 | 53,735 |
Investments in debt-related investments | (14,910) | (615) |
Principal collections on debt-related investments | 2,083 | 0 |
Investments in unconsolidated joint venture partnerships | (34,095) | (7,673) |
Investments in available-for-sale debt securities | (2,993) | 0 |
Other | 310 | 1,257 |
Net cash (used in) provided by investing activities | (62,927) | 19,170 |
Financing activities: | ||
Repayments of mortgage notes | (531) | (70,932) |
Proceeds from line of credit | 157,258 | 208,000 |
Repayments of line of credit | (167,000) | (166,000) |
Redemptions of common stock | (38,349) | (35,455) |
Distributions paid to common stockholders, redeemable noncontrolling interest holders and noncontrolling interest holders | (17,401) | (14,505) |
Proceeds from issuance of common stock | 8,179 | 39,700 |
Proceeds from financing obligations, net | 131,157 | 83,834 |
Offering costs for issuance of common stock and private placements | (4,545) | (4,157) |
Cash payout of DST interests | (3,217) | 0 |
Redemption of noncontrolling interests | (8,074) | (10,930) |
Redemption of redeemable noncontrolling interests | (1,954) | 0 |
Debt issuance costs paid | (125) | (45) |
Interest rate cap premiums | 0 | (9,340) |
Net cash provided by financing activities | 55,398 | 20,170 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (6) | 0 |
Net increase in cash, cash equivalents and restricted cash | 257 | 23,567 |
Cash, cash equivalents and restricted cash, at beginning of period | 19,666 | 17,186 |
Cash, cash equivalents and restricted cash, at end of period | $ 19,923 | $ 40,753 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | ARES REAL ESTATE INCOME TRUST INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION Unless the context otherwise requires, the “Company,” “we,” “our” or “us” refers to Ares Real Estate Income Trust Inc. and its consolidated subsidiaries. We are externally managed by Ares Commercial Real Estate Management LLC (the “Advisor”). The accompanying unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain disclosures normally included in the annual audited financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been omitted. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 13, 2024 (“2023 Form 10-K”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Global macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policy, higher interest rates and challenges in the supply chain, coupled with the conflicts in Ukraine and in the Middle East, have the potential to negatively impact us. These current macroeconomic conditions may continue or aggravate and could cause the United States to experience an economic slowdown or recession. We anticipate our business and operations could be materially adversely affected by a prolonged recession in the United States. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with GAAP. As used herein, the term “commercial” refers to our office, retail and industrial properties or customers, as applicable. Reclassifications Certain items in our condensed consolidated statements of cash flows for the three months ended March 31, 2023 have been reclassified to conform to the 2024 presentation. Revision of Noncontrolling Interests During the year ended December 31, 2023, we identified misstatements associated with allocations between stockholders’ equity and noncontrolling interests. Specifically, noncontrolling interests were not adjusted through additional paid-in capital and accumulated other comprehensive income within stockholders’ equity to reflect the changing ownership percentage of third-party holders of partnership units (“OP Units”) in AREIT Operating Partnership LP (the “Operating Partnership”) for each period dating back to 2008. Based on an analysis of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections and Staff Accounting Bulletin 99 “Materiality,” we determined that these allocation misstatements were immaterial to the previously issued condensed consolidated financial statements. These immaterial misstatements have no impact on our net income, net assets, cash flows, or the value of our common stock or OP Units. Each period the ownership of the Operating Partnership varies between us, as the general partner and a limited partner, and the other limited partners of the Operating Partnership. This occurs for a variety of reasons, including the issuance of common stock or OP Units at net asset value (“NAV”), the redemption of common stock or OP Units at NAV, and the exchange or transfer of OP Units. Transactions that change our ownership interest in the Operating Partnership are accounted for as equity transactions if we retain our controlling financial interest in the Operating Partnership and no gain or loss is recognized in net income. Subsequently, the net equity balance in the Operating Partnership should be adjusted to reflect the changes in ownership of the Operating Partnership between us and the other limited partners. These adjustments are based on each partner’s respective ownership at the end of each period and are reflected as a reallocation between additional paid-in capital and accumulated other comprehensive income within stockholders’ equity and noncontrolling interests within our equity section on our condensed consolidated balance sheets and our unaudited condensed consolidated statements of equity. The following table summarizes the effects of these reallocations on prior period balances: Cumulative Adjustment Current Period ($ in thousands) As Previously Reported Prior to Period Quarterly Reallocation As Revised As of March 31, 2023 Additional paid-in capital $ 1,751,993 $ 154,488 $ (2,427) $ 1,904,054 Accumulated other comprehensive income (loss) $ 7,897 $ 2,935 $ (204) $ 10,628 Noncontrolling interests $ 393,098 $ (157,423) $ 2,631 $ 238,306 Foreign Currency The U.S. dollar is the functional and reporting currency of the Company. All foreign currency asset and liability amounts are monetary assets and liabilities and therefore are remeasured into U.S. dollars based on the spot rate at the end of each period. We have executed borrowings in the same foreign currency as our foreign investments to protect against the foreign currency exchange rate risk inherent in transactions denominated in foreign currencies. As our foreign currency asset and liability amounts are associated with a foreign currency denominated investment in unconsolidated joint venture partnership, we have included all foreign currency unrealized gains and losses within income from investments in unconsolidated joint venture partnerships on the condensed consolidated statements of operations. |
INVESTMENTS IN REAL ESTATE PROP
INVESTMENTS IN REAL ESTATE PROPERTIES | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENTS IN REAL ESTATE PROPERTIES | |
INVESTMENTS IN REAL ESTATE PROPERTIES | 2. INVESTMENTS IN REAL ESTATE PROPERTIES The following table summarizes our consolidated investments in real estate properties: As of (in thousands) March 31, 2024 December 31, 2023 Land $ 754,149 $ 754,149 Buildings and improvements 3,482,944 3,505,921 Intangible lease assets 324,498 330,291 Right of use asset 13,637 13,637 Investment in real estate properties 4,575,228 4,603,998 Accumulated depreciation and amortization (708,338) (714,684) Net investment in real estate properties $ 3,866,890 $ 3,889,314 Dispositions During the three months ended March 31, 2024, we did not sell any properties. During the three months ended March 31, 2023, we sold one partial retail property for net proceeds of approximately $53.7 million and recorded a net gain on sale of $36.9 million. Intangible Lease Assets and Liabilities Intangible lease assets and liabilities as of March 31, 2024 and December 31, 2023 included the following: As of March 31, 2024 As of December 31, 2023 Accumulated Accumulated (in thousands) Gross Amortization Net Gross Amortization Net Intangible lease assets (1) $ 300,943 $ (234,352) $ 66,591 $ 306,365 $ (234,172) $ 72,193 Above-market lease assets (1) 23,555 (20,388) 3,167 23,926 (20,525) 3,401 Below-market lease liabilities (72,418) 36,365 (36,053) (73,556) 36,477 (37,079) (1) Included in net investment in real estate properties on the condensed consolidated balance sheets. Rental Revenue Adjustments and Depreciation and Amortization Expense The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities and real estate-related depreciation and amortization expense: For the Three Months Ended March 31, (in thousands) 2024 2023 Increase (decrease) to rental revenue: Straight-line rent adjustments $ 1,582 $ 1,068 Above-market lease amortization (234) (186) Below-market lease amortization 1,027 1,014 Real estate-related depreciation and amortization: Depreciation expense $ 29,845 $ 26,417 Intangible lease asset amortization 5,625 6,780 |
INVESTMENTS IN UNCONSOLIDATED J
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS | |
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS | 3. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS We hold investments in unconsolidated joint venture partnerships that are accounted for under the equity method of accounting or the fair value option. We made our first investment in unconsolidated joint venture partnerships for which we have elected the fair value option during the first quarter of 2024. We account for these investments at fair value with the associated unrealized gains and losses recorded as a component of income from unconsolidated joint venture partnerships on our condensed consolidated statements of operations. The following table summarizes our investments in unconsolidated joint venture partnerships as of March 31, 2024 and December 31, 2023: Number of Joint Venture Investments in Unconsolidated Partnerships as of Ownership Percentage as of Joint Venture Partnerships as of March 31, December 31, March 31, December 31, March 31, December 31, ($ in thousands) 2024 2023 2024 2023 2024 2023 Investments in unconsolidated joint venture partnerships, carried at cost: Residential joint venture partnerships 1 1 85.0 % 85.0 % $ 23,643 $ 23,932 Net Lease joint venture partnerships 3 3 50.0 % 50.0 % 105,170 104,232 Data Center joint venture partnerships 2 2 10.0 % 10.0 % 26,168 24,977 Real Estate Debt joint venture partnerships (1) 1 1 19.9 % 19.9 % 200 164 Total investments in unconsolidated joint venture partnerships, carried at cost 155,181 153,305 Investments in unconsolidated joint venture partnerships, carried at fair value: Industrial joint venture partnerships (1) 1 — 27.4 % N/A 34,092 — Total investments in unconsolidated joint venture partnerships, carried at fair value 34,092 — Total $ 189,273 $ 153,305 (1) Includes joint venture partnerships that invest in assets and properties in Europe. As of March 31, 2024, we had unfunded commitments of $208.6 million, in aggregate, related to our investments in unconsolidated joint venture partnerships. The following table summarizes income (loss) in unconsolidated joint venture partnerships for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, (in thousands) 2024 2023 Income (loss) from unconsolidated joint venture partnerships, carried at cost: Equity in income (loss) from unconsolidated joint venture partnerships $ 1,202 $ (2,446) Total income (loss) from unconsolidated joint venture partnerships, carried at cost 1,202 (2,446) Income (loss) from unconsolidated joint venture partnerships, carried at fair value: Gain on investment 1,387 — Foreign currency loss on investment (482) — Total income from unconsolidated joint venture partnerships, carried at fair value 905 — Other foreign currency gain (loss): Foreign currency gain on debt held in foreign currencies 181 — Foreign currency loss on remeasurement of cash and cash equivalents (6) — Total other foreign currency gain 175 — Total $ 2,282 $ (2,446) |
INVESTMENTS IN REAL ESTATE DEBT
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES. | |
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES | 4. INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES Debt-Related Investments The following table summarizes our debt-related investments as of March 31, 2024 and December 31, 2023: Weighted-Average Weighted-Average ($ in thousands) Carrying Amount (1) Outstanding Principal (1) Interest Rate Remaining Life (Years) As of March 31, 2024 Senior loans $ 159,002 $ 160,602 10.1 % 2.0 Mezzanine loans 103,773 104,685 11.4 0.6 Total debt-related investments $ 262,775 $ 265,287 10.6 % 1.4 As of December 31, 2023 Senior loans $ 141,737 $ 143,550 9.8 % 2.2 Mezzanine loans 106,064 106,768 11.4 0.9 Total debt-related investments $ 247,801 $ 250,318 10.5 % 1.6 (1) The difference between the carrying amount and the outstanding principal amount of the debt-related investments consists of unamortized purchase discount, deferred financing costs, loan origination costs, and any recorded credit loss reserves, if applicable. Current Expected Credit Losses As of March 31, 2024, our reserve for current expected credit losses (“CECL Reserve”) for our debt-related investment portfolio was $1.9 million or 0.6% of our debt-related investment commitment balance of $329.7 million. As of March 31, 2024, the debt-related investment commitment balance was comprised of $265.3 million of funded commitments and $64.4 million of unfunded commitments with associated CECL Reserves of $1.5 million and $0.4 million, respectively. As of December 31, 2023, our CECL Reserve for our debt-related investment portfolio was $2.0 million or 0.6% of our debt-related investment commitment balance of $331.2 million. As of December 31, 2023, the debt-related investment commitment balance was comprised of $250.3 million of funded commitments and $80.9 million of unfunded commitments with associated CECL Reserves of $1.3 million and $0.7 million, respectively. The following table summarizes activity related to our CECL Reserve on funded commitments for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, ($ in thousands) 2024 2023 Balance at beginning of the year $ 1,327 $ — Provision for current expected credit losses 145 3,492 Write-offs — — Recoveries — — Ending balance (1) $ 1,472 $ 3,492 (1) The CECL Reserve related to funded commitments is included in investments in real estate debt and securities on the condensed consolidated balance sheets. The following table summarizes activity related to our CECL Reserve on unfunded commitments for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, ($ in thousands) 2024 2023 Balance at beginning of the year $ 670 $ — Provision for current expected credit losses (278) 2,138 Write-offs — — Recoveries — — Ending balance (1) $ 392 $ 2,138 (1) The CECL Reserve related to unfunded commitments is included in other liabilities on the condensed consolidated balance sheets. During the three months ended March 31, 2024, we received $2.1 million of partial principal repayments on one mezzanine loan debt-related investment. There were no principal repayments on debt-related investments during the three months ended March 31, 2023. Available-for-Sale Debt Securities As of March 31, 2024 we had one preferred equity investment, one commercial real estate collateralized loan obligations (“CRE CLO” or multiple “CRE CLOs”) and one commercial mortgage-backed security (“CMBS”) designated as available-for-sale debt securities. As of December 31, 2023, we had one preferred equity investment and one CRE CLO designated as available-for-sale debt securities. As of March 31, 2024 and December 31, 2023, the weighted-average remaining term of our CRE CLOs and CMBS, which is based on the estimated fully extended maturity dates of the underlying loans of the debt security, was 3.2 years and 3.1 years, respectively, and the remaining term of our preferred equity investment was 2.8 We had no unfunded commitments related to our preferred equity investment as of March 31, 2024 or December 31, 2023. There were no credit losses associated with our available-for-sale debt securities as of March 31, 2024 or December 31, 2023. ($ in thousands) Face Amount Amortized Cost Unamortized Discount Unamortized Fees (1) Unrealized Gain, Net (2) Fair Value As of March 31, 2024 CRE CLOs & CMBS $ 17,482 $ 17,396 $ 86 $ — $ 144 $ 17,540 Preferred equity 111,916 111,127 — 789 — 111,127 Total debt securities $ 129,398 $ 128,523 $ 86 $ 789 $ 144 $ 128,667 As of December 31, 2023 CRE CLOs $ 14,910 $ 14,825 $ 85 $ — $ 158 $ 14,983 Preferred equity 108,250 107,392 — 858 — 107,392 Total debt securities $ 123,160 $ 122,217 $ 85 $ 858 $ 158 $ 122,375 (1) Includes unamortized loan origination fees received on debt securities. (2) Represents cumulative unrealized gain beginning from acquisition date. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
DEBT. | |
DEBT | 5. DEBT A summary of our consolidated debt is as follows: Weighted-Average Effective Interest Rate as of Balance as of March 31, December 31, March 31, December 31, ($ in thousands) 2024 2023 Current Maturity Date 2024 2023 Line of credit (1) 5.37 % 5.35 % November 2025 $ 357,077 $ 367,000 Term loan (2) 3.36 3.31 November 2026 400,000 400,000 Term loan (3) 4.31 4.26 January 2027 400,000 400,000 Fixed-rate mortgage notes 4.46 4.46 January 2027 - May 2031 595,660 596,191 Floating-rate mortgage notes (4) 5.25 5.25 October 2024 - October 2026 207,600 207,600 Total principal amount / weighted-average (5) 4.46 % 4.43 % $ 1,960,337 $ 1,970,791 Less: unamortized debt issuance costs $ (15,754) $ (17,038) Add: unamortized mark-to-market adjustment on assumed debt 7,107 7,367 Total debt, net $ 1,951,690 $ 1,961,120 Gross book value of properties encumbered by debt $ 1,393,709 $ 1,391,173 (1) The effective interest rate for our borrowings in U.S. dollars, which was $323.0 million as of March 31, 2024, is calculated based on the Term Secured Overnight Financing Rate (“Term SOFR”) plus an 11.448 basis point adjustment (“Adjusted Term SOFR”), plus a margin ranging from 1.25% to 2.00% depending on our consolidated leverage ratio. The effective interest rate for our borrowings in pound sterling, which was $34.1 million as of March 31, 2024 when converted to U.S. dollars, is calculated based on the Sterling Overnight Index Average Reference Rate (“SONIA”) plus a 3.26 basis point adjustment, plus a margin ranging from 1.25% to 2.00% depending on our consolidated leverage ratio. As of March 31, 2024, the unused and available portions under the line of credit were approximately $542.9 million and $357.5 million, respectively. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate cap agreements relating to $150.0 million in borrowings under this line of credit. The line of credit is available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. (2) The effective interest rate is calculated based on Adjusted Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $200.0 million in borrowings under this term loan and interest rate cap agreements relating to $200.0 million in borrowings under this term loan. (3) The effective interest rate is calculated based on Adjusted Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $350.0 million in borrowings under this term loan and an interest rate cap agreement relating to $50.0 million in borrowings under this term loan. (4) The effective interest rate is calculated based on Adjusted Term SOFR plus a margin ranging from 1.55% to 2.50% . The weighted-average interest rate is the all-in interest rate, including the effects of interest rate cap agreements which capped the effective interest rates of our two floating-rate mortgage notes at 5.61% and 4.66% , respectively, as of March 31, 2024. (5) The weighted-average remaining term of our consolidated borrowings was 2.9 years as of March 31, 2024, excluding the impact of certain extension options. For the three months ended March 31, 2024 and 2023, the amount of interest incurred related to our consolidated indebtedness, excluding amortization of debt issuance costs, was $26.1 million and $19.6 million, respectively. See “Note 6” for the amount of interest incurred related to the DST Program (as defined below). As of March 31, 2024, the principal payments due on our consolidated debt during each of the next five years and thereafter were as follows: (in thousands) Line of Credit (1) Term Loans Mortgage Notes (2) Total Remainder of 2024 $ — $ — $ 128,708 $ 128,708 2025 357,077 — 2,646 359,723 2026 — 400,000 85,396 485,396 2027 — 400,000 177,034 577,034 2028 — — 90,477 90,477 Thereafter — — 318,999 318,999 Total principal payments $ 357,077 $ 800,000 $ 803,260 $ 1,960,337 (1) The term of the line of credit may be extended pursuant to two six-month extension options, subject to certain conditions. (2) A $127.0 million mortgage note matures in October 2024 and the term may be extended pursuant to a one-year extension option, subject to certain conditions. A $115.0 million mortgage note matures in January 2027 and may be extended pursuant to two one-year extension options, subject to certain conditions. Debt Covenants Our line of credit, term loans and mortgage note agreements contain various property-level covenants, including customary affirmative and negative covenants. In addition, the line of credit and term loan agreements contain certain corporate-level financial covenants, including leverage ratio, fixed charge coverage ratio and tangible net worth thresholds. We were in compliance with our debt covenants as of March 31, 2024. Derivative Instruments To manage interest rate risk for certain of our variable-rate debt, we use interest rate derivative instruments as part of our risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by either providing a fixed interest rate or capping the variable interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the interest rate swap agreements without exchange of the underlying notional amount. Interest rate caps involve the receipt of variable amounts from a counterparty at the end of each period in which the interest rate exceeds the agreed fixed price. Certain of our variable-rate borrowings are not hedged, and therefore, to an extent, we have ongoing exposure to interest rate movements. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss is recorded as a component of accumulated other comprehensive income (loss) (“AOCI”) on the condensed consolidated balance sheets and is reclassified into earnings as interest expense for the same period that the hedged transaction affects earnings, which is when the interest expense is recognized on the related debt. During the next 12 months, we estimate that $ 12.3 million will be reclassified as a decrease to interest expense related to active effective hedges of existing floating-rate debt. For derivatives that are not designated and do not qualify as hedges, changes in fair value are recognized through income. As a result, in periods with high interest rate volatility, we may experience significant fluctuations in our net income (loss). The following table summarizes the location and fair value of our consolidated derivative instruments on our condensed consolidated balance sheets: Number of Fair Value ($ in thousands) Contracts Notional Amount (1) Other Assets Other Liabilities As of March 31, 2024 Interest rate swaps designated as cash flow hedges 9 $ 550,000 $ 11,646 $ — Interest rate caps designated as cash flow hedges 8 607,600 21,997 Total derivative instruments 17 $ 1,157,600 $ 33,643 $ — As of December 31, 2023 Interest rate swaps designated as cash flow hedges 12 $ 650,000 $ 10,510 $ — Interest rate caps designated as cash flow hedges 8 507,600 21,746 — Total derivative instruments 20 $ 1,157,600 $ 32,256 $ — (1) As of December 31, 2023, notional amount excludes an aggregate $100.0 million of notional amount for three interest rate cap agreements entered into in November 2023 with effective dates in February 2024. These interest rate cap agreements replaced separate interest rate swap agreements with an aggregate $100.0 million of notional amount that expired at the end of January 2024. The following table presents the effect of our consolidated derivative instruments on our condensed consolidated financial statements: For the Three Months Ended March 31, (in thousands) 2024 2023 Derivative instruments designated as cash flow hedges: Gain (loss) recognized in AOCI $ 9,659 $ (4,000) Amount reclassified from AOCI as a decrease into interest expense (4,890) (3,056) Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded 44,234 37,545 Derivative instruments not designated as cash flow hedges: Unrealized loss on derivative instruments recognized in other income (expenses) (1) $ — $ (1,224) Realized gain on derivative instruments recognized in other income (expenses) (2) — 1,121 (1) Unrealized loss on changes in fair value of derivative instruments relates to mark-to-market changes on our derivatives not designated as cash flow hedges. (2) Realized gain on derivative instruments relates to interim settlements for our derivatives not designated as cash flow hedges. |
DST PROGRAM
DST PROGRAM | 3 Months Ended |
Mar. 31, 2024 | |
DST PROGRAM. | |
DST PROGRAM | 6. DST PROGRAM We have a program to raise capital through private placement offerings by selling beneficial interests (“DST Interests”) in specific Delaware statutory trusts (a “DST” or multiple “DSTs”) holding real properties (the “DST Program”). Under the DST Program, each private placement offers interests in one or more real properties placed into one or more DSTs by the Operating Partnership or its affiliates (each, a “DST Property” and collectively, the “DST Properties”). In order to facilitate additional capital raise through the DST Program, we have made and may continue to offer loans (“DST Program Loans”) to finance a portion of the sale of DST Interests to potential investors. The following table summarizes our DST Program Loans as of March 31, 2024 and December 31, 2023: Weighted-Average Weighted-Average ($ in thousands) Outstanding Principal Unrealized Gain, Net (1) Book Value Interest Rate Remaining Life (Years) As of March 31, 2024 DST Program Loans, carried at cost $ 103,268 $ N/A $ 103,268 5.2 % 8.0 DST Program Loans, carried at fair value 19,914 — 19,914 6.3 % 10.0 Total $ 123,182 $ — $ 123,182 5.4 % 8.3 As of December 31, 2023 DST Program Loans, carried at cost $ 109,266 $ N/A $ 109,266 5.1 % 8.4 DST Program Loans, carried at fair value 7,753 — 7,753 6.4 % 10.0 Total $ 117,019 $ — $ 117,019 5.2 % 8.5 (1) Represents cumulative unrealized gain or loss on DST Program Loans carried at fair value. The following table summarizes our financing obligations, net as of March 31, 2024 and December 31, 2023: DST Interests Unamortized Total Unrealized Book ($ in thousands) Sold (1) Program Costs Appreciation (2) Gain, Net (3) Value As of March 31, 2024 Financing obligations, carried at cost $ 1,169,757 $ (932) $ — $ N/A $ 1,168,825 Financing obligations, carried at fair value 245,127 N/A N/A (3,753) 241,374 Total $ 1,414,884 $ (932) $ — $ (3,753) $ 1,410,199 As of December 31, 2023 Financing obligations, carried at cost $ 1,238,639 $ (863) $ 11,269 $ N/A $ 1,249,045 Financing obligations, carried at fair value 102,977 N/A N/A (932) 102,045 Total $ 1,341,616 $ (863) $ 11,269 $ (932) $ 1,351,090 (1) DST Interests sold are presented net of upfront fees. (2) Represents cumulative financing obligation liability appreciation on financing obligations carried at cost. (3) Represents cumulative unrealized gain or loss on financing obligations carried at fair value. The following table presents our DST Program activity for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, (in thousands) 2024 2023 DST Interests sold $ 147,297 $ 101,795 DST Interests financed by DST Program Loans 12,161 14,015 Income earned from DST Program Loans (1) 1,581 1,017 (Decrease) increase in financing obligation liability appreciation (2) (69) 2,862 Rent obligation incurred under master lease agreements (2) 16,064 13,583 (1) Included in other income and expenses on the condensed consolidated statements of operations. (2) Included in interest expense on the condensed consolidated statements of operations. We record DST Interests as financing obligation liabilities for accounting purposes. If we exercise our option to reacquire a DST Property by issuing OP Units in exchange for DST Interests, we relieve the related financing obligation liability and DST Program Loans and record the issuance of the OP Units as an issuance of equity. During the three months ended March 31, 2024, 9.0 million OP Units were issued in exchange for DST Interests for a net investment of $72.0 million in accordance with our Umbrella Partnership Real Estate Investment Trust (“UPREIT”) structure. In addition, we paid $3.2 million in cash in exchange for DST Interests during the three months ended March 31, 2024. There were no OP Units issued or cash paid Refer to “Note 11” for detail relating to the fees paid to the Advisor and its affiliates for raising capital through the DST Program. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2024 | |
FAIR VALUE. | |
FAIR VALUE | 7. FAIR VALUE We estimate the fair value of our financial assets and liabilities using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of the amounts that we would realize upon disposition of our financial assets and liabilities. Fair Value Measurements on a Recurring Basis The following table presents our financial assets and liabilities measured at fair value on a recurring basis: Total (in thousands) Level 1 Level 2 Level 3 Fair Value As of March 31, 2024 Assets: Derivative instruments $ — $ 33,643 $ — $ 33,643 Investments in unconsolidated joint venture partnerships — — 34,092 34,092 Available-for-sale debt securities — 17,540 111,127 128,667 DST Program Loans — — 19,914 19,914 Total assets measured at fair value $ — $ 51,183 $ 165,133 $ 216,316 Liabilities: Financing obligations $ — $ — $ 241,374 $ 241,374 Total liabilities measured at fair value $ — $ — $ 241,374 $ 241,374 As of December 31, 2023 Assets: Derivative instruments $ — $ 32,256 $ — $ 32,256 Available-for-sale debt securities — 14,983 107,392 122,375 DST Program Loans — — 7,753 7,753 Total assets measured at fair value $ — $ 47,239 $ 115,145 $ 162,384 Liabilities: Financing obligations $ — $ — $ 102,045 $ 102,045 Total liabilities measured at fair value $ — $ — $ 102,045 $ 102,045 The following methods and assumptions were used to estimate the fair value of each class of financial assets and liabilities: Derivative Instruments. Investments in Unconsolidated Joint Venture Partnerships. Available-for-Sale Debt Securities. In such cases, the initial value will generally be determined . Following the initial measurement, fair value is estimated by utilizing or reviewing certain of the following: (i) market yield data, (ii) discounted cash flow modeling, (iii) collateral asset performance, (iv) local or macro real estate performance, (v) capital market conditions, (vi) debt yield, debt-service coverage and/or loan-to-value ratios, and (vii) borrower financial condition and performance. The inputs used in estimating the fair value of these preferred equity investments are generally considered Level 3. DST Program Loans. Financing Obligations. The following table presents our financial assets measured at fair value on a recurring basis using Level 3 inputs: Investments in Unconsolidated Joint Available-For-Sale DST Program ($ in thousands) Venture Partnerships Debt Securities Loans Total Balance as of December 31, 2023 $ — $ 107,392 $ 7,753 $ 115,145 Purchases and contributions 33,187 — 12,161 45,348 Paid-in-kind interest — 3,666 — 3,666 Gain on investment (1) 1,387 — — 1,387 Foreign currency loss on investment (1) (482) — — (482) Amortization of loan origination fees (2) — 69 — 69 Balance as of March 31, 2024 $ 34,092 $ 111,127 $ 19,914 $ 165,133 (1) Included in income from investments in unconsolidated joint venture partnerships on the condensed consolidated statements of operations. (2) Included in debt-related income on the condensed consolidated statements of operations. The following table presents our financial liabilities measured at fair value on a recurring basis using Level 3 inputs: Financing ($ in thousands) Obligations Balance as of December 31, 2023 $ 102,045 DST Interests sold, net of upfront fees 142,150 Unrealized gain on financing obligations (2,821) Balance as of March 31, 2024 $ 241,374 The following table presents the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy as of March 31, 2024: Valuation Unobservable Impact to Valuation from ($ in thousands) Fair Value Technique Inputs an Increase to Input Assets: Investments in unconsolidated joint venture partnerships $ 34,092 Direct Capitalization Capitalization Rate Decrease Available-for-sale debt securities (1) 111,127 Yield Method Market Yield Decrease DST Program Loans 19,914 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 241,374 Discounted Cash Flow Discount Rate Decrease (1) As of March 31, 2024, the market yield used in determining the fair value of our available-for sale debt security was 13.3% . The following table presents the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy as of December 31, 2023: Valuation Unobservable Impact to Valuation from ($ in thousands) Fair Value Technique Inputs an Increase to Input Assets: Available-for-sale debt securities (1) $ 107,392 Yield Method Market Yield Decrease DST Program Loans 7,753 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 102,045 Discounted Cash Flow Discount Rate Decrease (1) As of December 31, 2023, the market yield used in determining the fair value of our available-for sale debt security was 13.3% . Financial Assets and Liabilities Not Measured at Fair Value As of March 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses and distribution fees payable approximate their carrying values because of the short-term nature of these instruments. The table below includes fair values for certain of our financial instruments for which it is practicable to estimate fair value. The carrying values and fair values of these financial instruments were as follows: As of March 31, 2024 As of December 31, 2023 Level in Fair Carrying Fair Carrying Fair (in thousands) Value Hierarchy Value (1) Value Value (1) Value Assets: Debt-related investments 3 $ 265,287 $ 265,505 $ 250,318 $ 250,215 DST Program Loans (2) 3 103,268 100,770 109,266 107,297 Liabilities: Line of credit 3 $ 357,077 $ 357,077 $ 367,000 $ 367,000 Term loans 3 800,000 800,000 800,000 800,000 Mortgage notes 3 803,260 771,474 803,791 778,235 (1) The carrying value reflects the principal amount outstanding. (2) Only includes instruments for which we have not elected the fair value option and do not record at fair value on the condensed consolidated balance sheets. The initial value of debt-related investments will generally be determined using the acquisition price of such investment if acquired, or the par value of such investment if originated. Following the initial measurement, fair value is estimated by utilizing or reviewing certain of the following: (i) market yield data, (ii) discounted cash flow modeling, (iii) collateral asset performance, (iv) local or macro real estate performance, (v) capital market conditions, (vi) debt yield, debt-service coverage and/or loan-to-value ratios, and (vii) borrower financial condition and performance. The estimate of fair value of DST Program Loans, line of credit, term loans and mortgage notes takes into consideration various factors including current market rates and conditions and similar agreements with comparable loan-to-value ratios and credit profiles, as applicable. Debt instruments with near-term maturities are generally valued at par. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
EQUITY | |
EQUITY | 8. EQUITY Public Offerings We may conduct ongoing public offerings that will not have a predetermined duration, subject to continued compliance with the rules and regulations of the SEC and applicable state laws. On May 3, 2022, the SEC declared our registration statement on Form S-11 with respect to our fourth public offering of up to $10.0 billion of shares of its common stock effective, and the fourth public offering commenced the same day. We ceased selling shares of our common stock under our third public offering of up to $3.0 billion of shares immediately upon the effectiveness of the registration statement for the fourth public offering. Under the fourth public offering, we are offering up to $8.5 billion of shares of our common stock in the primary offering and up to $1.5 billion of shares of our common stock pursuant to our distribution reinvestment plan, in any combination of Class T shares, Class S shares, Class D shares and Class I shares. We may reallocate amounts between the primary offering and distribution reinvestment plan. Pursuant to our public offerings, we offered and continue to offer shares of our common stock at the “transaction price,” plus applicable upfront selling commissions and dealer manager fees. The “transaction price” generally is equal to the NAV per share of our common stock most recently disclosed. Our NAV per share is calculated as of the last calendar day of each month for each of our outstanding classes of stock, and will be available generally within 15 calendar days after the end of the applicable month. Shares issued pursuant to our distribution reinvestment plan are offered at the transaction price, as indicated above, in effect on the distribution date. We may update a previously disclosed transaction price in cases where we believe there has been a material change (positive or negative) to our NAV per share relative to the most recently disclosed monthly NAV per share. During the three months ended March 31, 2024, we raised gross proceeds of approximately $16.5 million from the sale of approximately 2.0 million shares of our common stock in our current ongoing public offerings, including proceeds from our distribution reinvestment plan of approximately $8.3 million. Common Stock The following table describes the changes in each class of common shares during the periods presented below: Class T Class S Class D Class I Class E Total (in thousands) Shares Shares Shares Shares Shares Shares FOR THE THREE MONTHS ENDED MARCH 31, 2023 Balance as of December 31, 2022 26,884 49,237 7,871 69,142 52,974 206,108 Issuance of common stock: Primary shares 1,325 972 45 2,117 — 4,459 Distribution reinvestment plan 134 227 40 331 175 907 Redemptions of common stock (69) (561) (240) (2,557) (599) (4,026) Conversions (101) 24 (277) 354 — — Balance as of March 31, 2023 28,173 49,899 7,439 69,387 52,550 207,448 FOR THE THREE MONTHS ENDED MARCH 31, 2024 Balance as of December 31, 2023 28,432 48,145 6,930 65,511 48,210 197,228 Issuance of common stock: Primary shares 261 250 37 453 — 1,001 Distribution reinvestment plan 160 270 41 371 186 1,028 Redemptions of common stock (375) (1,011) (118) (2,027) (1,241) (4,772) Conversions (76) (63) (15) 154 — — Balance as of March 31, 2024 28,402 47,591 6,875 64,462 47,155 194,485 Distributions The following table summarizes our distribution activity (including distributions to noncontrolling interests and distributions reinvested in shares of our common stock) for the periods below: Amount Common Stock Declared per Distributions Other Cash Reinvested in Distribution Gross (in thousands, except per share data) Common Share (1) Paid in Cash Distributions (2) Shares Fees (3) Distributions (4) 2024 March 31 $ 0.10000 $ 10,013 $ 8,577 $ 8,238 $ 1,317 $ 28,145 Total $ 0.10000 $ 10,013 $ 8,577 $ 8,238 $ 1,317 $ 28,145 2023 March 31 $ 0.09375 $ 9,912 $ 5,271 $ 8,009 $ 1,461 $ 24,653 June 30 0.09375 9,896 5,510 7,974 1,463 24,843 September 30 0.10000 10,335 6,451 8,431 1,430 26,647 December 31 0.10000 10,127 7,739 8,317 1,387 27,570 Total $ 0.38750 $ 40,270 $ 24,971 $ 32,731 $ 5,741 $ 103,713 (1) Amount reflects the total gross quarterly distribution rate authorized by our board of directors per Class T share, per Class S share, per Class D share, per Class I share and per Class E share of common stock. Distributions were declared and paid as of monthly record dates. These monthly distributions have been aggregated and presented on a quarterly basis. The distributions on Class T shares, Class S shares and Class D shares of common stock are reduced by the respective distribution fees that are payable with respect to Class T shares, Class S shares and Class D shares. (2) Consists of distribution fees paid to Ares Wealth Management Solutions, LLC (the “Dealer Manager”) with respect to OP Units and distributions paid to holders of OP Units and other noncontrolling interest holders. (3) Distribution fees are paid monthly to the Dealer Manager, with respect to Class T shares, Class S shares and Class D shares. All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (4) Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares, Class S shares and Class D shares issued in the primary portion of our current public offerings. Redemptions and Repurchases Below is a summary of redemptions and repurchases pursuant to our share redemption program for the three months ended March 31, 2024 and 2023. All eligible redemption requests were fulfilled for the periods presented. Eligible redemption requests are requests submitted in good order by the request submission deadline set forth in the share redemption program. Our board of directors may modify or suspend our current share redemption programs if it deems such action to be in the best interest of our stockholders. For the Three Months Ended March 31, (in thousands, except for per share data) 2024 2023 Number of shares redeemed or repurchased 4,772 4,026 Aggregate dollar amount of shares redeemed or repurchased $ 38,349 $ 35,455 Average redemption or repurchase price per share $ 8.04 $ 8.81 |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS | 3 Months Ended |
Mar. 31, 2024 | |
REDEEMABLE NONCONTROLLING INTERESTS | |
REDEEMABLE NONCONTROLLING INTERESTS | 9. REDEEMABLE NONCONTROLLING INTERESTS The Operating Partnership’s net income and loss will generally be allocated to the general partner and the limited partners in accordance with the respective percentage interest in the OP Units issued by the Operating Partnership. The Operating Partnership issued OP Units to the Advisor and Black Creek Diversified Property Advisors Group LLC (the “Former Sponsor”) as payment of the performance participation allocation (also referred to as the performance component of the advisory fee) pursuant to that certain advisory agreement by and among the Company, the Operating Partnership, and the Advisor (the “Advisory Agreement”). The Advisor and Former Sponsor subsequently transferred these OP Units to its members or their affiliates or redeemed for cash. We have classified these OP Units as redeemable noncontrolling interests in mezzanine equity on the condensed consolidated balance sheets. The redeemable noncontrolling interests are recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such OP Units at the end of each measurement period. As of both March 31, 2024 and December 31, 2023, we had redeemable OP Units outstanding of 1.4 million. The following table summarizes the redeemable noncontrolling interests activity for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, ($ in thousands) 2024 2023 Balance at beginning of the year $ 11,746 $ 18,130 Distributions to redeemable noncontrolling interests (144) (192) Net loss attributable to redeemable noncontrolling interests (111) (18) Change from securities and cash flow hedging activities attributable to redeemable noncontrolling interests 24 (55) Redemption value allocation adjustment to redeemable noncontrolling interests (1) (200) (74) Ending balance $ 11,315 $ 17,791 (1) Represents the adjustment recorded in order to mark to the redemption value, which is equivalent to fair value, at the end of the measurement period. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 3 Months Ended |
Mar. 31, 2024 | |
NONCONTROLLING INTERESTS. | |
NONCONTROLLING INTERESTS | 10. NONCONTROLLING INTERESTS OP Units The following table summarizes the number of OP Units issued and outstanding to third-party investors (excludes interests held by redeemable noncontrolling interest holders): For the Three Months Ended March 31, (in thousands) 2024 2023 Balance at beginning of period 78,737 55,079 Issuance of units 8,976 — Redemption of units (1,009) (1,240) Balance at end of period 86,704 53,839 Subject to certain restrictions and limitations, the holders of OP Units may redeem all or a portion of their OP Units for either: shares of the equivalent class of common stock, cash or a combination of both. If we elect to redeem OP Units for shares of our common stock, we will generally deliver one share of our common stock for each such OP Unit redeemed (subject to any redemption fees withheld), and such shares may, subsequently, only be redeemed for cash in accordance with the terms of our share redemption program. If we elect to redeem OP Units for cash, the cash delivered per unit will equal the then-current NAV per unit of the applicable class of OP Units (subject to any redemption fees withheld), which will equal the then-current NAV per share of our corresponding class of shares. During the three months ended March 31, 2024 and 2023, the aggregate amount of OP Units redeemed was $8.1 million and $10.9 million, respectively. The estimated maximum redemption value of the aggregate outstanding OP Units issued to third-party investors as of March 31, 2024 and December 31, 2023 was $680.1 million and $641.1 million, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2024 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 11. RELATED PARTY TRANSACTIONS Summary of Fees and Expenses The table below summarizes the fees and expenses incurred by us for services provided by the Advisor and its affiliates, and by the Dealer Manager related to the services the Dealer Manager provided in connection with our securities offerings and any related amounts payable: For the Three Months Ended March 31, Payable as of (in thousands) 2024 2023 March 31, 2024 December 31, 2023 Selling commissions and dealer manager fees (1) $ 101 $ 512 $ — $ — Ongoing distribution fees (1)(2) 2,286 2,154 772 804 Advisory fees—fixed component 9,972 9,538 3,304 3,281 Other fees and expense reimbursements—Advisor (3)(4) 3,683 3,106 4,495 3,909 Other expense reimbursements—Dealer Manager 40 — 355 84 Property accounting fee (5) 477 489 160 170 DST Program selling commissions, dealer manager and distribution fees (1) 2,351 2,671 359 308 Other DST Program related costs—Advisor (4) 2,252 1,931 171 171 Total $ 21,162 $ 20,401 $ 9,616 $ 8,727 (1) All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (2) The distribution fees are payable monthly in arrears. Additionally, we accrue for future estimated amounts payable related to ongoing distribution fees. The future estimated amounts payable were approximately $ 64.2 million and $66.7 million as of March 31, 2024 and December 31, 2023, respectively. (3) Other expense reimbursements include certain expenses incurred for organization and offering, acquisition and general administrative services provided to us under the Advisory Agreement, including, but not limited to, certain expenses described below after footnote 5, allocated rent paid to both third parties and affiliates of our Advisor, equipment, utilities, insurance, travel and entertainment. (4) Includes costs reimbursed to the Advisor related to the DST Program. (5) The cost of the property management fee, including the property accounting fee, is generally borne by the tenant or tenants at each real property, either via a direct reimbursement to us or, in the case of tenants subject to a gross lease, as part of the lease cost. In certain circumstances, we may pay for a portion of the property management fee, including the property accounting fee, without reimbursement from the tenant or tenants at a real property. Certain of the expense reimbursements described in the table above include a portion of the compensation expenses of officers and employees of the Advisor or its affiliates related to activities for which the Advisor did not otherwise receive a separate fee. Amounts incurred related to these compensation expenses for the three months ended March 31, 2024 and 2023 were approximately $3.4 million and $2.8 million, respectively. No reimbursement is made for compensation of our named executive officers unless the named executive officer is providing stockholder services, as outlined in the Advisory Agreement. Performance Participation Allocation The allocation of the performance participation interest is ultimately determined at the end of each calendar year and will be paid in Class I OP Units or cash, at the election of the Advisor. The performance hurdle was not achieved as of either March 31, 2024 or 2023, therefore no performance participation allocation expense was recognized in our condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023. |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2024 | |
NET INCOME (LOSS) PER COMMON SHARE | |
NET INCOME (LOSS) PER COMMON SHARE | 12. NET INCOME (LOSS) PER COMMON SHARE The computation of our basic and diluted net income (loss) per share attributable to common stockholders is as follows: For the Three Months Ended March 31, (in thousands, except per share data) 2024 2023 Net loss attributable to common stockholders—basic $ (15,001) $ (2,004) Net loss attributable to redeemable noncontrolling interests (111) (18) Net loss attributable to noncontrolling interests (6,477) (549) Net loss attributable to common stockholders—diluted $ (21,589) $ (2,571) Weighted-average shares outstanding—basic 195,679 206,774 Incremental weighted-average shares effect of conversion of noncontrolling interests 85,694 56,252 Weighted-average shares outstanding—diluted 281,373 263,026 Net loss per share attributable to common stockholders: Basic $ (0.08) $ (0.01) Diluted $ (0.08) $ (0.01) |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
SUPPLEMENTAL CASH FLOW INFORMATION | 13. SUPPLEMENTAL CASH FLOW INFORMATION Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows: For the Three Months Ended March 31, (in thousands) 2024 2023 Supplemental disclosure of non-cash investing and financing activities: Distributions reinvested in common stock $ 8,275 $ 7,990 Decrease in accrued future ongoing distribution fees (2,439) (1,800) Increase in DST Program Loans receivable through DST Program capital raising 12,161 14,015 Issuances of OP Units for DST Interests 72,034 — Restricted Cash Restricted cash consists of lender and property-related escrow accounts. The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows: For the Three Months Ended March 31, (in thousands) 2024 2023 Beginning of period: Cash and cash equivalents $ 15,052 $ 13,336 Restricted cash 4,614 3,850 Cash, cash equivalents and restricted cash $ 19,666 $ 17,186 End of period: Cash and cash equivalents $ 15,739 $ 36,894 Restricted cash 4,184 3,859 Cash, cash equivalents and restricted cash $ 19,923 $ 40,753 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Litigation From time to time, we and our subsidiaries may be involved in various claims and legal actions arising in the ordinary course of business. As of March 31, 2024, we and our subsidiaries were not involved in any material legal proceedings. Environmental Matters A majority of the properties we acquire have been or will be subject to environmental reviews either by us or the previous owners. In addition, we may incur environmental remediation costs associated with certain land parcels we may acquire in connection with the development of land. We have acquired or may in the future acquire certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous materials. We may purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. We are not aware of any environmental liabilities that we believe would have a material adverse effect on our business, financial condition, or results of operations as of March 31, 2024. Unfunded Commitments As of March 31, 2024, we had unfunded commitments of $273.0 million to fund various investments in real estate debt and securities and investments in unconsolidated joint venture partnerships. |
SEGMENT FINANCIAL INFORMATION
SEGMENT FINANCIAL INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
SEGMENT FINANCIAL INFORMATION | |
SEGMENT FINANCIAL INFORMATION | 15. SEGMENT FINANCIAL INFORMATION Our six reportable segments are office properties, retail properties, residential properties, industrial properties, other properties and investments in real estate debt and securities. Factors used to determine our reportable segments include the physical and economic characteristics of our properties and/or investments and the related operating activities. Our chief operating decision makers rely on net operating income, among other factors, to make decisions about allocating resources and assessing segment performance. Net operating income is the key performance metric that captures the unique operating characteristics of each segment. Net investment in real estate properties, investments in real estate debt and securities, restricted cash, tenant receivables, straight-line rent receivables and other assets directly assignable to a property or investment are allocated to the segment groupings. Corporate items that are not directly assignable to a property, such as investments in unconsolidated joint venture partnerships and DST Program Loans, are not allocated to segment groupings, but are reflected as reconciling items. The following table reflects our total consolidated assets by segment as of March 31, 2024 and December 31, 2023: As of (in thousands) March 31, 2024 December 31, 2023 Assets: Office properties $ 365,646 $ 373,467 Retail properties 507,138 509,307 Residential properties 1,655,860 1,658,945 Industrial properties 1,342,961 1,353,331 Other properties (1) 54,764 55,130 Investments in real estate debt and securities 391,442 370,176 Corporate 363,856 319,050 Total assets $ 4,681,667 $ 4,639,406 (1) Includes self-storage properties. The following table is a reconciliation of our reported net income (loss) attributable to common stockholders to our net operating income for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, (in thousands) 2024 2023 Net loss attributable to common stockholders $ (15,001) $ (2,004) Real estate-related depreciation and amortization 35,470 33,197 General and administrative expenses 3,337 3,044 Advisory fees 9,972 9,538 Acquisition costs and reimbursements 2,043 1,169 Valuation allowance on debt-related investment — 2,520 (Income) loss from unconsolidated joint venture partnerships (2,282) 2,446 Interest expense 44,234 37,545 Gain on sale of real estate property — (36,884) Unrealized gain on financing obligations (2,821) — Loss on extinguishment of debt and financing commitments, net — 700 Loss on derivative instruments — 103 Provision for current expected credit losses (133) 5,630 Other income and expenses (1,289) (1,016) Net loss attributable to redeemable noncontrolling interests (111) (18) Net loss attributable to noncontrolling interests (6,477) (549) Net operating income $ 66,942 $ 55,421 The following table sets forth consolidated financial results by segment for the three months ended March 31, 2024 and 2023: Other Debt and (in thousands) Office Retail Residential Industrial Properties Securities Consolidated For the Three Months Ended March 31, 2024 Rental revenues $ 12,194 $ 15,469 $ 33,085 $ 26,455 $ 928 $ — $ 88,131 Debt-related income — — — — — 11,311 11,311 Rental expenses (6,355) (3,952) (15,672) (6,170) (351) — (32,500) Net operating income $ 5,839 $ 11,517 $ 17,413 $ 20,285 $ 577 $ 11,311 $ 66,942 Real estate-related depreciation and amortization $ 3,967 $ 3,958 $ 12,181 $ 14,842 $ 522 $ — $ 35,470 For the Three Months Ended March 31, 2023 Rental revenues $ 13,349 $ 14,518 $ 28,848 $ 21,245 $ — $ — $ 77,960 Debt-related income — — — — — 5,761 5,761 Rental expenses (6,630) (3,584) (13,190) (4,896) — — (28,300) Net operating income $ 6,719 $ 10,934 $ 15,658 $ 16,349 $ — $ 5,761 $ 55,421 Real estate-related depreciation and amortization $ 3,963 $ 4,035 $ 9,489 $ 15,710 $ — $ — $ 33,197 We consider net operating income to be an appropriate supplemental performance measure and believe net operating income provides useful information to our investors regarding our financial condition and results of operations because net operating income reflects the operating performance of our investments and excludes certain items that are not considered to be controllable in connection with the management of the investments, such as real estate-related depreciation and amortization, general and administrative expenses, advisory fees, impairment charges, interest expense, gains on sale of properties, other income and expenses, gains and losses on the extinguishment of debt and noncontrolling interests. However, net operating income should not be viewed as an alternative measure of our financial performance since it excludes such items, which could materially impact our results of operations. Further, our net operating income may not be comparable to that of other real estate companies, as they may use different methodologies for calculating net operating income. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 16. SUBSEQUENT EVENTS Renewal of Advisory Agreement Ares Real Estate Income Trust Inc., the Operating Partnership and the Advisor previously entered into that certain Second Amended and Restated Advisory Agreement (2023), effective June 3, 2023 (the “Amended Advisory Agreement”). The term of the Amended Advisory Agreement continued through April 30, 2024, subject to renewal for an unlimited number of one-year periods. Effective as of April 30, 2024, Ares Real Estate Income Trust Inc., the Operating Partnership and the Advisor renewed the Amended Advisory Agreement through April 30, 2025 by entering into the Amended and Restated Advisory Agreement (2024) (the “2024 Advisory Agreement”). The terms of the 2024 Advisory Agreement are substantially the same as the terms of the prior version of the agreement. In addition to the renewal, the 2024 Advisory Agreement amends the Amended Advisory Agreement by clarifying that the property accounting services provided by the Advisor do not include financial systems and software and consultants related thereto, and that the Advisor may be reimbursed for expenses related to such financial systems and software and consultants related thereto. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
BASIS OF PRESENTATION | |
Schedule of Effect of Reallocations on Prior Period Balances | The following table summarizes the effects of these reallocations on prior period balances: Cumulative Adjustment Current Period ($ in thousands) As Previously Reported Prior to Period Quarterly Reallocation As Revised As of March 31, 2023 Additional paid-in capital $ 1,751,993 $ 154,488 $ (2,427) $ 1,904,054 Accumulated other comprehensive income (loss) $ 7,897 $ 2,935 $ (204) $ 10,628 Noncontrolling interests $ 393,098 $ (157,423) $ 2,631 $ 238,306 |
INVESTMENTS IN REAL ESTATE PR_2
INVESTMENTS IN REAL ESTATE PROPERTIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENTS IN REAL ESTATE PROPERTIES | |
Schedule of Consolidated Investments in Real Estate Properties | The following table summarizes our consolidated investments in real estate properties: As of (in thousands) March 31, 2024 December 31, 2023 Land $ 754,149 $ 754,149 Buildings and improvements 3,482,944 3,505,921 Intangible lease assets 324,498 330,291 Right of use asset 13,637 13,637 Investment in real estate properties 4,575,228 4,603,998 Accumulated depreciation and amortization (708,338) (714,684) Net investment in real estate properties $ 3,866,890 $ 3,889,314 |
Schedule of Intangible Lease Assets and Liabilities | Intangible lease assets and liabilities as of March 31, 2024 and December 31, 2023 included the following: As of March 31, 2024 As of December 31, 2023 Accumulated Accumulated (in thousands) Gross Amortization Net Gross Amortization Net Intangible lease assets (1) $ 300,943 $ (234,352) $ 66,591 $ 306,365 $ (234,172) $ 72,193 Above-market lease assets (1) 23,555 (20,388) 3,167 23,926 (20,525) 3,401 Below-market lease liabilities (72,418) 36,365 (36,053) (73,556) 36,477 (37,079) (1) Included in net investment in real estate properties on the condensed consolidated balance sheets. |
Schedule of Rental Revenue and Depreciation and Amortization Expense | The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities and real estate-related depreciation and amortization expense: For the Three Months Ended March 31, (in thousands) 2024 2023 Increase (decrease) to rental revenue: Straight-line rent adjustments $ 1,582 $ 1,068 Above-market lease amortization (234) (186) Below-market lease amortization 1,027 1,014 Real estate-related depreciation and amortization: Depreciation expense $ 29,845 $ 26,417 Intangible lease asset amortization 5,625 6,780 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS | |
Schedule of Equity Method Investments | The following table summarizes our investments in unconsolidated joint venture partnerships as of March 31, 2024 and December 31, 2023: Number of Joint Venture Investments in Unconsolidated Partnerships as of Ownership Percentage as of Joint Venture Partnerships as of March 31, December 31, March 31, December 31, March 31, December 31, ($ in thousands) 2024 2023 2024 2023 2024 2023 Investments in unconsolidated joint venture partnerships, carried at cost: Residential joint venture partnerships 1 1 85.0 % 85.0 % $ 23,643 $ 23,932 Net Lease joint venture partnerships 3 3 50.0 % 50.0 % 105,170 104,232 Data Center joint venture partnerships 2 2 10.0 % 10.0 % 26,168 24,977 Real Estate Debt joint venture partnerships (1) 1 1 19.9 % 19.9 % 200 164 Total investments in unconsolidated joint venture partnerships, carried at cost 155,181 153,305 Investments in unconsolidated joint venture partnerships, carried at fair value: Industrial joint venture partnerships (1) 1 — 27.4 % N/A 34,092 — Total investments in unconsolidated joint venture partnerships, carried at fair value 34,092 — Total $ 189,273 $ 153,305 (1) Includes joint venture partnerships that invest in assets and properties in Europe. The following table summarizes income (loss) in unconsolidated joint venture partnerships for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, (in thousands) 2024 2023 Income (loss) from unconsolidated joint venture partnerships, carried at cost: Equity in income (loss) from unconsolidated joint venture partnerships $ 1,202 $ (2,446) Total income (loss) from unconsolidated joint venture partnerships, carried at cost 1,202 (2,446) Income (loss) from unconsolidated joint venture partnerships, carried at fair value: Gain on investment 1,387 — Foreign currency loss on investment (482) — Total income from unconsolidated joint venture partnerships, carried at fair value 905 — Other foreign currency gain (loss): Foreign currency gain on debt held in foreign currencies 181 — Foreign currency loss on remeasurement of cash and cash equivalents (6) — Total other foreign currency gain 175 — Total $ 2,282 $ (2,446) |
INVESTMENTS IN REAL ESTATE DE_2
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES. | |
Summary of Debt Related Investments | The following table summarizes our debt-related investments as of March 31, 2024 and December 31, 2023: Weighted-Average Weighted-Average ($ in thousands) Carrying Amount (1) Outstanding Principal (1) Interest Rate Remaining Life (Years) As of March 31, 2024 Senior loans $ 159,002 $ 160,602 10.1 % 2.0 Mezzanine loans 103,773 104,685 11.4 0.6 Total debt-related investments $ 262,775 $ 265,287 10.6 % 1.4 As of December 31, 2023 Senior loans $ 141,737 $ 143,550 9.8 % 2.2 Mezzanine loans 106,064 106,768 11.4 0.9 Total debt-related investments $ 247,801 $ 250,318 10.5 % 1.6 (1) The difference between the carrying amount and the outstanding principal amount of the debt-related investments consists of unamortized purchase discount, deferred financing costs, loan origination costs, and any recorded credit loss reserves, if applicable. |
Summary of Expected Credit Losses | The following table summarizes activity related to our CECL Reserve on funded commitments for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, ($ in thousands) 2024 2023 Balance at beginning of the year $ 1,327 $ — Provision for current expected credit losses 145 3,492 Write-offs — — Recoveries — — Ending balance (1) $ 1,472 $ 3,492 (1) The CECL Reserve related to funded commitments is included in investments in real estate debt and securities on the condensed consolidated balance sheets. The following table summarizes activity related to our CECL Reserve on unfunded commitments for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, ($ in thousands) 2024 2023 Balance at beginning of the year $ 670 $ — Provision for current expected credit losses (278) 2,138 Write-offs — — Recoveries — — Ending balance (1) $ 392 $ 2,138 (1) The CECL Reserve related to unfunded commitments is included in other liabilities on the condensed consolidated balance sheets. |
Summary of Available-for-Sale Debt Securities | The following table summarizes our investments in available-for-sale debt securities as of March 31, 2024 and December 31, 2023: ($ in thousands) Face Amount Amortized Cost Unamortized Discount Unamortized Fees (1) Unrealized Gain, Net (2) Fair Value As of March 31, 2024 CRE CLOs & CMBS $ 17,482 $ 17,396 $ 86 $ — $ 144 $ 17,540 Preferred equity 111,916 111,127 — 789 — 111,127 Total debt securities $ 129,398 $ 128,523 $ 86 $ 789 $ 144 $ 128,667 As of December 31, 2023 CRE CLOs $ 14,910 $ 14,825 $ 85 $ — $ 158 $ 14,983 Preferred equity 108,250 107,392 — 858 — 107,392 Total debt securities $ 123,160 $ 122,217 $ 85 $ 858 $ 158 $ 122,375 (1) Includes unamortized loan origination fees received on debt securities. (2) Represents cumulative unrealized gain beginning from acquisition date. |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
DEBT. | |
Schedule of Debt | A summary of our consolidated debt is as follows: Weighted-Average Effective Interest Rate as of Balance as of March 31, December 31, March 31, December 31, ($ in thousands) 2024 2023 Current Maturity Date 2024 2023 Line of credit (1) 5.37 % 5.35 % November 2025 $ 357,077 $ 367,000 Term loan (2) 3.36 3.31 November 2026 400,000 400,000 Term loan (3) 4.31 4.26 January 2027 400,000 400,000 Fixed-rate mortgage notes 4.46 4.46 January 2027 - May 2031 595,660 596,191 Floating-rate mortgage notes (4) 5.25 5.25 October 2024 - October 2026 207,600 207,600 Total principal amount / weighted-average (5) 4.46 % 4.43 % $ 1,960,337 $ 1,970,791 Less: unamortized debt issuance costs $ (15,754) $ (17,038) Add: unamortized mark-to-market adjustment on assumed debt 7,107 7,367 Total debt, net $ 1,951,690 $ 1,961,120 Gross book value of properties encumbered by debt $ 1,393,709 $ 1,391,173 (1) The effective interest rate for our borrowings in U.S. dollars, which was $323.0 million as of March 31, 2024, is calculated based on the Term Secured Overnight Financing Rate (“Term SOFR”) plus an 11.448 basis point adjustment (“Adjusted Term SOFR”), plus a margin ranging from 1.25% to 2.00% depending on our consolidated leverage ratio. The effective interest rate for our borrowings in pound sterling, which was $34.1 million as of March 31, 2024 when converted to U.S. dollars, is calculated based on the Sterling Overnight Index Average Reference Rate (“SONIA”) plus a 3.26 basis point adjustment, plus a margin ranging from 1.25% to 2.00% depending on our consolidated leverage ratio. As of March 31, 2024, the unused and available portions under the line of credit were approximately $542.9 million and $357.5 million, respectively. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate cap agreements relating to $150.0 million in borrowings under this line of credit. The line of credit is available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. (2) The effective interest rate is calculated based on Adjusted Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $200.0 million in borrowings under this term loan and interest rate cap agreements relating to $200.0 million in borrowings under this term loan. (3) The effective interest rate is calculated based on Adjusted Term SOFR, plus a margin ranging from 1.20% to 1.90% depending on our consolidated leverage ratio. Total commitments for this term loan are $400.0 million. The weighted-average interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $350.0 million in borrowings under this term loan and an interest rate cap agreement relating to $50.0 million in borrowings under this term loan. (4) The effective interest rate is calculated based on Adjusted Term SOFR plus a margin ranging from 1.55% to 2.50% . The weighted-average interest rate is the all-in interest rate, including the effects of interest rate cap agreements which capped the effective interest rates of our two floating-rate mortgage notes at 5.61% and 4.66% , respectively, as of March 31, 2024. (5) The weighted-average remaining term of our consolidated borrowings was 2.9 years as of March 31, 2024, excluding the impact of certain extension options. |
Schedule of Maturities of Long-term Debt | As of March 31, 2024, the principal payments due on our consolidated debt during each of the next five years and thereafter were as follows: (in thousands) Line of Credit (1) Term Loans Mortgage Notes (2) Total Remainder of 2024 $ — $ — $ 128,708 $ 128,708 2025 357,077 — 2,646 359,723 2026 — 400,000 85,396 485,396 2027 — 400,000 177,034 577,034 2028 — — 90,477 90,477 Thereafter — — 318,999 318,999 Total principal payments $ 357,077 $ 800,000 $ 803,260 $ 1,960,337 (1) The term of the line of credit may be extended pursuant to two six-month extension options, subject to certain conditions. (2) A $127.0 million mortgage note matures in October 2024 and the term may be extended pursuant to a one-year extension option, subject to certain conditions. A $115.0 million mortgage note matures in January 2027 and may be extended pursuant to two one-year extension options, subject to certain conditions. |
Schedule of Derivative Instruments | The following table summarizes the location and fair value of our consolidated derivative instruments on our condensed consolidated balance sheets: Number of Fair Value ($ in thousands) Contracts Notional Amount (1) Other Assets Other Liabilities As of March 31, 2024 Interest rate swaps designated as cash flow hedges 9 $ 550,000 $ 11,646 $ — Interest rate caps designated as cash flow hedges 8 607,600 21,997 Total derivative instruments 17 $ 1,157,600 $ 33,643 $ — As of December 31, 2023 Interest rate swaps designated as cash flow hedges 12 $ 650,000 $ 10,510 $ — Interest rate caps designated as cash flow hedges 8 507,600 21,746 — Total derivative instruments 20 $ 1,157,600 $ 32,256 $ — (1) As of December 31, 2023, notional amount excludes an aggregate $100.0 million of notional amount for three interest rate cap agreements entered into in November 2023 with effective dates in February 2024. These interest rate cap agreements replaced separate interest rate swap agreements with an aggregate $100.0 million of notional amount that expired at the end of January 2024. |
Schedule of Derivative Instruments, Gain (Loss) | The following table presents the effect of our consolidated derivative instruments on our condensed consolidated financial statements: For the Three Months Ended March 31, (in thousands) 2024 2023 Derivative instruments designated as cash flow hedges: Gain (loss) recognized in AOCI $ 9,659 $ (4,000) Amount reclassified from AOCI as a decrease into interest expense (4,890) (3,056) Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded 44,234 37,545 Derivative instruments not designated as cash flow hedges: Unrealized loss on derivative instruments recognized in other income (expenses) (1) $ — $ (1,224) Realized gain on derivative instruments recognized in other income (expenses) (2) — 1,121 (1) Unrealized loss on changes in fair value of derivative instruments relates to mark-to-market changes on our derivatives not designated as cash flow hedges. (2) Realized gain on derivative instruments relates to interim settlements for our derivatives not designated as cash flow hedges. |
DST PROGRAM (Tables)
DST PROGRAM (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
DST PROGRAM. | |
Schedule of DST Program Loans | The following table summarizes our DST Program Loans as of March 31, 2024 and December 31, 2023: Weighted-Average Weighted-Average ($ in thousands) Outstanding Principal Unrealized Gain, Net (1) Book Value Interest Rate Remaining Life (Years) As of March 31, 2024 DST Program Loans, carried at cost $ 103,268 $ N/A $ 103,268 5.2 % 8.0 DST Program Loans, carried at fair value 19,914 — 19,914 6.3 % 10.0 Total $ 123,182 $ — $ 123,182 5.4 % 8.3 As of December 31, 2023 DST Program Loans, carried at cost $ 109,266 $ N/A $ 109,266 5.1 % 8.4 DST Program Loans, carried at fair value 7,753 — 7,753 6.4 % 10.0 Total $ 117,019 $ — $ 117,019 5.2 % 8.5 (1) Represents cumulative unrealized gain or loss on DST Program Loans carried at fair value. |
Schedule of Financing Obligations | The following table summarizes our financing obligations, net as of March 31, 2024 and December 31, 2023: DST Interests Unamortized Total Unrealized Book ($ in thousands) Sold (1) Program Costs Appreciation (2) Gain, Net (3) Value As of March 31, 2024 Financing obligations, carried at cost $ 1,169,757 $ (932) $ — $ N/A $ 1,168,825 Financing obligations, carried at fair value 245,127 N/A N/A (3,753) 241,374 Total $ 1,414,884 $ (932) $ — $ (3,753) $ 1,410,199 As of December 31, 2023 Financing obligations, carried at cost $ 1,238,639 $ (863) $ 11,269 $ N/A $ 1,249,045 Financing obligations, carried at fair value 102,977 N/A N/A (932) 102,045 Total $ 1,341,616 $ (863) $ 11,269 $ (932) $ 1,351,090 (1) DST Interests sold are presented net of upfront fees. (2) Represents cumulative financing obligation liability appreciation on financing obligations carried at cost. (3) Represents cumulative unrealized gain or loss on financing obligations carried at fair value. |
Schedule of DST Program Activity | The following table presents our DST Program activity for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, (in thousands) 2024 2023 DST Interests sold $ 147,297 $ 101,795 DST Interests financed by DST Program Loans 12,161 14,015 Income earned from DST Program Loans (1) 1,581 1,017 (Decrease) increase in financing obligation liability appreciation (2) (69) 2,862 Rent obligation incurred under master lease agreements (2) 16,064 13,583 (1) Included in other income and expenses on the condensed consolidated statements of operations. (2) Included in interest expense on the condensed consolidated statements of operations. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
FAIR VALUE. | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents our financial assets and liabilities measured at fair value on a recurring basis: Total (in thousands) Level 1 Level 2 Level 3 Fair Value As of March 31, 2024 Assets: Derivative instruments $ — $ 33,643 $ — $ 33,643 Investments in unconsolidated joint venture partnerships — — 34,092 34,092 Available-for-sale debt securities — 17,540 111,127 128,667 DST Program Loans — — 19,914 19,914 Total assets measured at fair value $ — $ 51,183 $ 165,133 $ 216,316 Liabilities: Financing obligations $ — $ — $ 241,374 $ 241,374 Total liabilities measured at fair value $ — $ — $ 241,374 $ 241,374 As of December 31, 2023 Assets: Derivative instruments $ — $ 32,256 $ — $ 32,256 Available-for-sale debt securities — 14,983 107,392 122,375 DST Program Loans — — 7,753 7,753 Total assets measured at fair value $ — $ 47,239 $ 115,145 $ 162,384 Liabilities: Financing obligations $ — $ — $ 102,045 $ 102,045 Total liabilities measured at fair value $ — $ — $ 102,045 $ 102,045 |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | The following table presents our financial assets measured at fair value on a recurring basis using Level 3 inputs: Investments in Unconsolidated Joint Available-For-Sale DST Program ($ in thousands) Venture Partnerships Debt Securities Loans Total Balance as of December 31, 2023 $ — $ 107,392 $ 7,753 $ 115,145 Purchases and contributions 33,187 — 12,161 45,348 Paid-in-kind interest — 3,666 — 3,666 Gain on investment (1) 1,387 — — 1,387 Foreign currency loss on investment (1) (482) — — (482) Amortization of loan origination fees (2) — 69 — 69 Balance as of March 31, 2024 $ 34,092 $ 111,127 $ 19,914 $ 165,133 (1) Included in income from investments in unconsolidated joint venture partnerships on the condensed consolidated statements of operations. (2) Included in debt-related income on the condensed consolidated statements of operations. |
Schedule of Financial Liabilities Measured at Fair Value on a Recurring Basis | The following table presents our financial liabilities measured at fair value on a recurring basis using Level 3 inputs: Financing ($ in thousands) Obligations Balance as of December 31, 2023 $ 102,045 DST Interests sold, net of upfront fees 142,150 Unrealized gain on financing obligations (2,821) Balance as of March 31, 2024 $ 241,374 |
Schedule of Quantitative Inputs and Assumptions | The following table presents the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy as of March 31, 2024: Valuation Unobservable Impact to Valuation from ($ in thousands) Fair Value Technique Inputs an Increase to Input Assets: Investments in unconsolidated joint venture partnerships $ 34,092 Direct Capitalization Capitalization Rate Decrease Available-for-sale debt securities (1) 111,127 Yield Method Market Yield Decrease DST Program Loans 19,914 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 241,374 Discounted Cash Flow Discount Rate Decrease (1) As of March 31, 2024, the market yield used in determining the fair value of our available-for sale debt security was 13.3% . The following table presents the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy as of December 31, 2023: Valuation Unobservable Impact to Valuation from ($ in thousands) Fair Value Technique Inputs an Increase to Input Assets: Available-for-sale debt securities (1) $ 107,392 Yield Method Market Yield Decrease DST Program Loans 7,753 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 102,045 Discounted Cash Flow Discount Rate Decrease (1) As of December 31, 2023, the market yield used in determining the fair value of our available-for sale debt security was 13.3% . |
Schedule of Carrying Values and Fair Values of These Financial Instruments | The table below includes fair values for certain of our financial instruments for which it is practicable to estimate fair value. The carrying values and fair values of these financial instruments were as follows: As of March 31, 2024 As of December 31, 2023 Level in Fair Carrying Fair Carrying Fair (in thousands) Value Hierarchy Value (1) Value Value (1) Value Assets: Debt-related investments 3 $ 265,287 $ 265,505 $ 250,318 $ 250,215 DST Program Loans (2) 3 103,268 100,770 109,266 107,297 Liabilities: Line of credit 3 $ 357,077 $ 357,077 $ 367,000 $ 367,000 Term loans 3 800,000 800,000 800,000 800,000 Mortgage notes 3 803,260 771,474 803,791 778,235 (1) The carrying value reflects the principal amount outstanding. (2) Only includes instruments for which we have not elected the fair value option and do not record at fair value on the condensed consolidated balance sheets. |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
EQUITY | |
Summary of Changes for Each Class of Common Stock | The following table describes the changes in each class of common shares during the periods presented below: Class T Class S Class D Class I Class E Total (in thousands) Shares Shares Shares Shares Shares Shares FOR THE THREE MONTHS ENDED MARCH 31, 2023 Balance as of December 31, 2022 26,884 49,237 7,871 69,142 52,974 206,108 Issuance of common stock: Primary shares 1,325 972 45 2,117 — 4,459 Distribution reinvestment plan 134 227 40 331 175 907 Redemptions of common stock (69) (561) (240) (2,557) (599) (4,026) Conversions (101) 24 (277) 354 — — Balance as of March 31, 2023 28,173 49,899 7,439 69,387 52,550 207,448 FOR THE THREE MONTHS ENDED MARCH 31, 2024 Balance as of December 31, 2023 28,432 48,145 6,930 65,511 48,210 197,228 Issuance of common stock: Primary shares 261 250 37 453 — 1,001 Distribution reinvestment plan 160 270 41 371 186 1,028 Redemptions of common stock (375) (1,011) (118) (2,027) (1,241) (4,772) Conversions (76) (63) (15) 154 — — Balance as of March 31, 2024 28,402 47,591 6,875 64,462 47,155 194,485 |
Summary of Distribution Activity | The following table summarizes our distribution activity (including distributions to noncontrolling interests and distributions reinvested in shares of our common stock) for the periods below: Amount Common Stock Declared per Distributions Other Cash Reinvested in Distribution Gross (in thousands, except per share data) Common Share (1) Paid in Cash Distributions (2) Shares Fees (3) Distributions (4) 2024 March 31 $ 0.10000 $ 10,013 $ 8,577 $ 8,238 $ 1,317 $ 28,145 Total $ 0.10000 $ 10,013 $ 8,577 $ 8,238 $ 1,317 $ 28,145 2023 March 31 $ 0.09375 $ 9,912 $ 5,271 $ 8,009 $ 1,461 $ 24,653 June 30 0.09375 9,896 5,510 7,974 1,463 24,843 September 30 0.10000 10,335 6,451 8,431 1,430 26,647 December 31 0.10000 10,127 7,739 8,317 1,387 27,570 Total $ 0.38750 $ 40,270 $ 24,971 $ 32,731 $ 5,741 $ 103,713 (1) Amount reflects the total gross quarterly distribution rate authorized by our board of directors per Class T share, per Class S share, per Class D share, per Class I share and per Class E share of common stock. Distributions were declared and paid as of monthly record dates. These monthly distributions have been aggregated and presented on a quarterly basis. The distributions on Class T shares, Class S shares and Class D shares of common stock are reduced by the respective distribution fees that are payable with respect to Class T shares, Class S shares and Class D shares. (2) Consists of distribution fees paid to Ares Wealth Management Solutions, LLC (the “Dealer Manager”) with respect to OP Units and distributions paid to holders of OP Units and other noncontrolling interest holders. (3) Distribution fees are paid monthly to the Dealer Manager, with respect to Class T shares, Class S shares and Class D shares. All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (4) Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares, Class S shares and Class D shares issued in the primary portion of our current public offerings. |
Summary of Redemptions and Repurchases Activity | Below is a summary of redemptions and repurchases pursuant to our share redemption program for the three months ended March 31, 2024 and 2023. All eligible redemption requests were fulfilled for the periods presented. Eligible redemption requests are requests submitted in good order by the request submission deadline set forth in the share redemption program. Our board of directors may modify or suspend our current share redemption programs if it deems such action to be in the best interest of our stockholders. For the Three Months Ended March 31, (in thousands, except for per share data) 2024 2023 Number of shares redeemed or repurchased 4,772 4,026 Aggregate dollar amount of shares redeemed or repurchased $ 38,349 $ 35,455 Average redemption or repurchase price per share $ 8.04 $ 8.81 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
REDEEMABLE NONCONTROLLING INTERESTS | |
Schedule of Redeemable Noncontrolling Interest Activity | The following table summarizes the redeemable noncontrolling interests activity for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, ($ in thousands) 2024 2023 Balance at beginning of the year $ 11,746 $ 18,130 Distributions to redeemable noncontrolling interests (144) (192) Net loss attributable to redeemable noncontrolling interests (111) (18) Change from securities and cash flow hedging activities attributable to redeemable noncontrolling interests 24 (55) Redemption value allocation adjustment to redeemable noncontrolling interests (1) (200) (74) Ending balance $ 11,315 $ 17,791 (1) Represents the adjustment recorded in order to mark to the redemption value, which is equivalent to fair value, at the end of the measurement period. |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
NONCONTROLLING INTERESTS. | |
Schedule of Noncontrolling Interest Balances | The following table summarizes the number of OP Units issued and outstanding to third-party investors (excludes interests held by redeemable noncontrolling interest holders): For the Three Months Ended March 31, (in thousands) 2024 2023 Balance at beginning of period 78,737 55,079 Issuance of units 8,976 — Redemption of units (1,009) (1,240) Balance at end of period 86,704 53,839 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
RELATED PARTY TRANSACTIONS | |
Schedule Fees and Expenses to the Advisor and Its Affiliates | The table below summarizes the fees and expenses incurred by us for services provided by the Advisor and its affiliates, and by the Dealer Manager related to the services the Dealer Manager provided in connection with our securities offerings and any related amounts payable: For the Three Months Ended March 31, Payable as of (in thousands) 2024 2023 March 31, 2024 December 31, 2023 Selling commissions and dealer manager fees (1) $ 101 $ 512 $ — $ — Ongoing distribution fees (1)(2) 2,286 2,154 772 804 Advisory fees—fixed component 9,972 9,538 3,304 3,281 Other fees and expense reimbursements—Advisor (3)(4) 3,683 3,106 4,495 3,909 Other expense reimbursements—Dealer Manager 40 — 355 84 Property accounting fee (5) 477 489 160 170 DST Program selling commissions, dealer manager and distribution fees (1) 2,351 2,671 359 308 Other DST Program related costs—Advisor (4) 2,252 1,931 171 171 Total $ 21,162 $ 20,401 $ 9,616 $ 8,727 (1) All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. (2) The distribution fees are payable monthly in arrears. Additionally, we accrue for future estimated amounts payable related to ongoing distribution fees. The future estimated amounts payable were approximately $ 64.2 million and $66.7 million as of March 31, 2024 and December 31, 2023, respectively. (3) Other expense reimbursements include certain expenses incurred for organization and offering, acquisition and general administrative services provided to us under the Advisory Agreement, including, but not limited to, certain expenses described below after footnote 5, allocated rent paid to both third parties and affiliates of our Advisor, equipment, utilities, insurance, travel and entertainment. (4) Includes costs reimbursed to the Advisor related to the DST Program. (5) The cost of the property management fee, including the property accounting fee, is generally borne by the tenant or tenants at each real property, either via a direct reimbursement to us or, in the case of tenants subject to a gross lease, as part of the lease cost. In certain circumstances, we may pay for a portion of the property management fee, including the property accounting fee, without reimbursement from the tenant or tenants at a real property. |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
NET INCOME (LOSS) PER COMMON SHARE | |
Schedule of Numerator and Denominator Used to Calculate Basic and Diluted Net Income (Loss) Per Common Share | The computation of our basic and diluted net income (loss) per share attributable to common stockholders is as follows: For the Three Months Ended March 31, (in thousands, except per share data) 2024 2023 Net loss attributable to common stockholders—basic $ (15,001) $ (2,004) Net loss attributable to redeemable noncontrolling interests (111) (18) Net loss attributable to noncontrolling interests (6,477) (549) Net loss attributable to common stockholders—diluted $ (21,589) $ (2,571) Weighted-average shares outstanding—basic 195,679 206,774 Incremental weighted-average shares effect of conversion of noncontrolling interests 85,694 56,252 Weighted-average shares outstanding—diluted 281,373 263,026 Net loss per share attributable to common stockholders: Basic $ (0.08) $ (0.01) Diluted $ (0.08) $ (0.01) |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of Supplemental Cash Flow Information and Disclosure Non-Cash Investing and Financing Activities | Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows: For the Three Months Ended March 31, (in thousands) 2024 2023 Supplemental disclosure of non-cash investing and financing activities: Distributions reinvested in common stock $ 8,275 $ 7,990 Decrease in accrued future ongoing distribution fees (2,439) (1,800) Increase in DST Program Loans receivable through DST Program capital raising 12,161 14,015 Issuances of OP Units for DST Interests 72,034 — |
Schedule of Cash, Cash Equivalents and Restricted Cash | Restricted cash consists of lender and property-related escrow accounts. The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows: For the Three Months Ended March 31, (in thousands) 2024 2023 Beginning of period: Cash and cash equivalents $ 15,052 $ 13,336 Restricted cash 4,614 3,850 Cash, cash equivalents and restricted cash $ 19,666 $ 17,186 End of period: Cash and cash equivalents $ 15,739 $ 36,894 Restricted cash 4,184 3,859 Cash, cash equivalents and restricted cash $ 19,923 $ 40,753 |
SEGMENT FINANCIAL INFORMATION (
SEGMENT FINANCIAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SEGMENT FINANCIAL INFORMATION | |
Summary of Total Assets by Business Segment | The following table reflects our total consolidated assets by segment as of March 31, 2024 and December 31, 2023: As of (in thousands) March 31, 2024 December 31, 2023 Assets: Office properties $ 365,646 $ 373,467 Retail properties 507,138 509,307 Residential properties 1,655,860 1,658,945 Industrial properties 1,342,961 1,353,331 Other properties (1) 54,764 55,130 Investments in real estate debt and securities 391,442 370,176 Corporate 363,856 319,050 Total assets $ 4,681,667 $ 4,639,406 (1) Includes self-storage properties. |
Summary of Reconciliation of Net Operating Income to Reported Net Income (Loss) | The following table is a reconciliation of our reported net income (loss) attributable to common stockholders to our net operating income for the three months ended March 31, 2024 and 2023: For the Three Months Ended March 31, (in thousands) 2024 2023 Net loss attributable to common stockholders $ (15,001) $ (2,004) Real estate-related depreciation and amortization 35,470 33,197 General and administrative expenses 3,337 3,044 Advisory fees 9,972 9,538 Acquisition costs and reimbursements 2,043 1,169 Valuation allowance on debt-related investment — 2,520 (Income) loss from unconsolidated joint venture partnerships (2,282) 2,446 Interest expense 44,234 37,545 Gain on sale of real estate property — (36,884) Unrealized gain on financing obligations (2,821) — Loss on extinguishment of debt and financing commitments, net — 700 Loss on derivative instruments — 103 Provision for current expected credit losses (133) 5,630 Other income and expenses (1,289) (1,016) Net loss attributable to redeemable noncontrolling interests (111) (18) Net loss attributable to noncontrolling interests (6,477) (549) Net operating income $ 66,942 $ 55,421 |
Summary of Revenue and Components of Net Operating Income | The following table sets forth consolidated financial results by segment for the three months ended March 31, 2024 and 2023: Other Debt and (in thousands) Office Retail Residential Industrial Properties Securities Consolidated For the Three Months Ended March 31, 2024 Rental revenues $ 12,194 $ 15,469 $ 33,085 $ 26,455 $ 928 $ — $ 88,131 Debt-related income — — — — — 11,311 11,311 Rental expenses (6,355) (3,952) (15,672) (6,170) (351) — (32,500) Net operating income $ 5,839 $ 11,517 $ 17,413 $ 20,285 $ 577 $ 11,311 $ 66,942 Real estate-related depreciation and amortization $ 3,967 $ 3,958 $ 12,181 $ 14,842 $ 522 $ — $ 35,470 For the Three Months Ended March 31, 2023 Rental revenues $ 13,349 $ 14,518 $ 28,848 $ 21,245 $ — $ — $ 77,960 Debt-related income — — — — — 5,761 5,761 Rental expenses (6,630) (3,584) (13,190) (4,896) — — (28,300) Net operating income $ 6,719 $ 10,934 $ 15,658 $ 16,349 $ — $ 5,761 $ 55,421 Real estate-related depreciation and amortization $ 3,963 $ 4,035 $ 9,489 $ 15,710 $ — $ — $ 33,197 |
BASIS OF PRESENTATION (Schedule
BASIS OF PRESENTATION (Schedule of Reallocations on Prior Period Balances) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Additional paid-in capital | $ 1,897,776 | $ 1,895,789 | $ 1,904,054 |
Accumulated other comprehensive income (loss) | 9,430 | 6,359 | 10,628 |
Noncontrolling interests | $ 343,382 | $ 316,119 | 238,306 |
Previously Reported | |||
Additional paid-in capital | 1,751,993 | ||
Accumulated other comprehensive income (loss) | 7,897 | ||
Noncontrolling interests | 393,098 | ||
Cumulative Adjustment Prior to Period | |||
Additional paid-in capital | 154,488 | ||
Accumulated other comprehensive income (loss) | 2,935 | ||
Noncontrolling interests | (157,423) | ||
Current Period Quarterly Reallocation | |||
Additional paid-in capital | (2,427) | ||
Accumulated other comprehensive income (loss) | (204) | ||
Noncontrolling interests | $ 2,631 |
INVESTMENTS IN REAL ESTATE PR_3
INVESTMENTS IN REAL ESTATE PROPERTIES (Schedule of Consolidated Investments in Real Estate Properties) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
INVESTMENTS IN REAL ESTATE PROPERTIES | ||
Land | $ 754,149 | $ 754,149 |
Buildings and improvements | 3,482,944 | 3,505,921 |
Intangible lease assets | 324,498 | 330,291 |
Right of use asset | $ 13,637 | $ 13,637 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Net investment in real estate properties | Net investment in real estate properties |
Investment in real estate properties | $ 4,575,228 | $ 4,603,998 |
Accumulated depreciation and amortization | (708,338) | (714,684) |
Net investment in real estate properties | $ 3,866,890 | $ 3,889,314 |
INVESTMENTS IN REAL ESTATE PR_4
INVESTMENTS IN REAL ESTATE PROPERTIES (Dispositions) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) property | Mar. 31, 2023 USD ($) property | |
Real Estate Properties [Line Items] | ||
Proceeds from disposition of real estate property | $ 0 | $ 53,735 |
Gain on sale of real estate property | $ 0 | 36,884 |
Disposed of by Sale | ||
Real Estate Properties [Line Items] | ||
Number of real estate properties | property | 0 | |
Proceeds from disposition of real estate property | 53,700 | |
Gain on sale of real estate property | $ 36,900 | |
Disposed of by Sale | Retail properties | ||
Real Estate Properties [Line Items] | ||
Number of real estate properties | property | 1 |
INVESTMENTS IN REAL ESTATE PR_5
INVESTMENTS IN REAL ESTATE PROPERTIES (Intangible Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Assets | $ 324,498 | $ 330,291 |
Gross, Liabilities | (72,418) | (73,556) |
Accumulated Amortization, Liabilities | 36,365 | 36,477 |
Net, Liabilities | (36,053) | (37,079) |
Intangible lease assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Assets | 300,943 | 306,365 |
Accumulated Amortization, Assets | (234,352) | (234,172) |
Net, Assets | 66,591 | 72,193 |
Above-market lease assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross, Assets | 23,555 | 23,926 |
Accumulated Amortization, Assets | (20,388) | (20,525) |
Net, Assets | $ 3,167 | $ 3,401 |
INVESTMENTS IN REAL ESTATE PR_6
INVESTMENTS IN REAL ESTATE PROPERTIES (Schedule of Adjustments to Rental Revenue Related to Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Straight-line rent adjustments | $ 1,582 | $ 1,068 |
Depreciation expense | 29,845 | 26,417 |
Intangible lease asset amortization | 5,625 | 6,780 |
Above-market lease assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of above and below Market Leases | (234) | (186) |
Below-market lease | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of above and below Market Leases | $ 1,027 | $ 1,014 |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) item | Dec. 31, 2023 USD ($) item | |
Schedule of Equity Method Investments [Line Items] | ||
Total investments in unconsolidated joint venture partnerships, carried at fair value | $ 34,092 | $ 0 |
Total | 189,273 | 153,305 |
Unconsolidated Joint Venture Partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Total investments in unconsolidated joint venture partnerships, carried at cost | 155,181 | 153,305 |
Total investments in unconsolidated joint venture partnerships, carried at fair value | 34,092 | |
Total | 189,273 | $ 153,305 |
Unfunded Capital commitment | $ 208,600 | |
Residential joint venture partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Joint venture partnerships | item | 1 | 1 |
Ownership percentage | 85% | 85% |
Total investments in unconsolidated joint venture partnerships, carried at cost | $ 23,643 | $ 23,932 |
Net Lease joint venture partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Joint venture partnerships | item | 3 | 3 |
Ownership percentage | 50% | 50% |
Total investments in unconsolidated joint venture partnerships, carried at cost | $ 105,170 | $ 104,232 |
Data Center joint venture partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Joint venture partnerships | item | 2 | 2 |
Ownership percentage | 10% | 10% |
Total investments in unconsolidated joint venture partnerships, carried at cost | $ 26,168 | $ 24,977 |
Real Estate Debt joint venture partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Joint venture partnerships | item | 1 | 1 |
Ownership percentage | 19.90% | 19.90% |
Total investments in unconsolidated joint venture partnerships, carried at cost | $ 200 | $ 164 |
Industrial joint venture partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Joint venture partnerships | item | 1 | |
Ownership percentage | 27.40% | |
Total investments in unconsolidated joint venture partnerships, carried at fair value | $ 34,092 |
INVESTMENTS IN UNCONSOLIDATED_4
INVESTMENTS IN UNCONSOLIDATED JOINT VENTURE PARTNERSHIPS (Income (Loss) in Unconsolidated Joint Venture Partnerships) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Other foreign currency gain (loss): | ||
Total | $ 2,282 | $ (2,446) |
Unconsolidated Joint Venture Partnerships | ||
Income (loss) from unconsolidated joint venture partnerships, carried at cost: | ||
Total income (loss) from unconsolidated joint venture partnerships, carried at cost | 1,202 | (2,446) |
Income (loss) from unconsolidated joint venture partnerships, carried at fair value: | ||
Gain on investment | 1,387 | |
Foreign currency gain on investment | (482) | |
Total income from unconsolidated joint venture partnerships, carried at fair value | 905 | |
Other foreign currency gain (loss): | ||
Foreign currency loss on debt held in foreign currencies | 181 | |
Foreign currency loss on remeasurement of cash and cash equivalents | (6) | |
Total other foreign currency loss | 175 | |
Total | $ 2,282 | $ (2,446) |
INVESTMENTS IN REAL ESTATE DE_3
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES (Debt Related Investments) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) contract | Dec. 31, 2023 USD ($) | |
Marketable Securities [Line Items] | ||
Carrying Amount | $ 262,775 | $ 247,801 |
Outstanding Principal | $ 265,287 | $ 250,318 |
Weighted-Average Interest Rate | 10.60% | 10.50% |
Weighted-Average Remaining Life (Years) | 1 year 4 months 24 days | 1 year 7 months 6 days |
Number of contracts | contract | 1 | |
Senior loans | ||
Marketable Securities [Line Items] | ||
Carrying Amount | $ 159,002 | $ 141,737 |
Outstanding Principal | $ 160,602 | $ 143,550 |
Weighted-Average Interest Rate | 10.10% | 9.80% |
Weighted-Average Remaining Life (Years) | 2 years | 2 years 2 months 12 days |
Mezzanine loans | ||
Marketable Securities [Line Items] | ||
Carrying Amount | $ 103,773 | $ 106,064 |
Outstanding Principal | $ 104,685 | $ 106,768 |
Weighted-Average Interest Rate | 11.40% | 11.40% |
Weighted-Average Remaining Life (Years) | 7 months 6 days | 10 months 24 days |
INVESTMENTS IN REAL ESTATE DE_4
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES (Current Expected Credit Losses) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) contract | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Marketable Securities [Line Items] | |||
Debt investments, Allowance for credit loss | $ 1,900 | $ 2,000 | |
Percentage of CECL Reserve to debt related investment commitment | 0.60% | 0.60% | |
Held to Maturity debt related Investments | $ 329,700 | $ 331,200 | |
Funded Commitment Balance | 265,300 | 250,300 | |
Unfunded Commitment Balance | 64,400 | 80,900 | |
Funded Commitments Related to Allowance | 1,500 | 1,300 | |
Unfunded Commitments Related to Allowance | 400 | 700 | |
Collection of principal repayments | $ 2,083 | $ 0 | 0 |
Number of contracts | contract | 1 | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the year | $ 2,000 | ||
Provision for current expected credit losses | (133) | 5,630 | |
Ending balance | 1,900 | 2,000 | |
Mezzanine loans | |||
Marketable Securities [Line Items] | |||
Collection of principal repayments | 2,100 | ||
Funded Loan Commitments | |||
Marketable Securities [Line Items] | |||
Debt investments, Allowance for credit loss | 1,472 | 3,492 | 1,327 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the year | 1,327 | ||
Provision for current expected credit losses | 145 | 3,492 | |
Ending balance | 1,472 | 3,492 | 1,327 |
Unfunded Loan Commitments | |||
Marketable Securities [Line Items] | |||
Debt investments, Allowance for credit loss | 392 | 2,138 | 670 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the year | 670 | ||
Provision for current expected credit losses | (278) | 2,138 | |
Ending balance | $ 392 | $ 2,138 | $ 670 |
INVESTMENTS IN REAL ESTATE DE_5
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES (Summary of Available for Sale Debt Securities) (Details) $ in Thousands | Mar. 31, 2024 USD ($) security | Dec. 31, 2023 USD ($) security |
Debt Securities, Available-for-Sale [Line Items] | ||
Face Amount | $ 129,398 | $ 123,160 |
Amortized Cost | 128,523 | 122,217 |
Unamortized Discount | 86 | 85 |
Unamortized Fees | 789 | 858 |
Unrealized Gain, Net | 144 | 158 |
Available-for-sale debt securities | 128,667 | 122,375 |
Credit loss | 0 | 0 |
Preferred equity | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Face Amount | 111,916 | 108,250 |
Amortized Cost | 111,127 | 107,392 |
Unamortized Fees | 789 | 858 |
Available-for-sale debt securities | $ 111,127 | $ 107,392 |
Number of available for sale debt securities | security | 1 | 1 |
Available-For-Sale, Debt Related Investment Unfunded Commitment | $ 0 | |
CRE CLOs & CMBS | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Face Amount | 17,482 | $ 14,910 |
Amortized Cost | 17,396 | 14,825 |
Unamortized Discount | 86 | 85 |
Unrealized Gain, Net | 144 | 158 |
Available-for-sale debt securities | $ 17,540 | $ 14,983 |
CRE CLO | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Number of available for sale debt securities | security | 1 | 1 |
CMBS | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Number of available for sale debt securities | security | 1 | |
Weighted Average | Preferred equity | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Available-for-sale debt securities, contractual maturity term | 2 years 9 months 18 days | 3 years 1 month 6 days |
Weighted Average | CRE CLO | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Available-for-sale debt securities, contractual maturity term | 3 years 2 months 12 days | 3 years 1 month 6 days |
DEBT (Schedule of Debt) (Detail
DEBT (Schedule of Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | |||
Weighted-Average Effective Interest Rate as of | 4.46% | 4.43% | |
Total borrowings | $ 1,960,337 | $ 1,970,791 | |
Less: unamortized debt issuance costs | (15,754) | (17,038) | |
Add: unamortized mark-to-market adjustment on assumed debt | 7,107 | 7,367 | |
Total debt, net | 1,951,690 | 1,961,120 | |
Gross book value of properties encumbered by debt | 1,393,709 | $ 1,391,173 | |
Interest expense | $ 26,100 | $ 19,600 | |
Weighted Average | |||
Debt Instrument [Line Items] | |||
Remaining debt term (in years) | 2 years 10 months 25 days | ||
Line of Credit | |||
Debt Instrument [Line Items] | |||
Weighted-Average Effective Interest Rate as of | 5.37% | 5.35% | |
Total borrowings | $ 357,077 | $ 367,000 | |
Current borrowing capacity | 542,900 | ||
Available portions under the line of credit | $ 357,500 | ||
Line of Credit | SOFR | |||
Debt Instrument [Line Items] | |||
Borrowings spread rate adjustment | 11.448% | ||
Line of Credit | SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 1.25% | ||
Line of Credit | SOFR | Maximum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 2% | ||
Line of Credit | SONIA | |||
Debt Instrument [Line Items] | |||
Borrowings spread rate adjustment | 3.26% | ||
Line of Credit | SONIA | Minimum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 1.25% | ||
Line of Credit | SONIA | Maximum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 2% | ||
Line of Credit | Interest rate caps | |||
Debt Instrument [Line Items] | |||
Total borrowings | $ 150,000 | ||
Line of Credit | U.S.dollars | |||
Debt Instrument [Line Items] | |||
Total borrowings | 323,000 | ||
Line of Credit | Pound sterling | |||
Debt Instrument [Line Items] | |||
Total borrowings | 34,100 | ||
Term Loan | |||
Debt Instrument [Line Items] | |||
Total borrowings | $ 800,000 | ||
Term Loan (Maturity Date November 2026) | |||
Debt Instrument [Line Items] | |||
Weighted-Average Effective Interest Rate as of | 3.36% | 3.31% | |
Total borrowings | $ 400,000 | $ 400,000 | |
Maximum borrowing capacity | $ 400,000 | ||
Term Loan (Maturity Date November 2026) | SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 1.20% | ||
Term Loan (Maturity Date November 2026) | SOFR | Maximum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 1.90% | ||
Term Loan (Maturity Date November 2026) | Interest rate swaps | |||
Debt Instrument [Line Items] | |||
Total borrowings | $ 200,000 | ||
Term Loan (Maturity Date November 2026) | Interest rate caps | |||
Debt Instrument [Line Items] | |||
Total borrowings | $ 200,000 | ||
Term Loan (Maturity Date January 2027) | |||
Debt Instrument [Line Items] | |||
Weighted-Average Effective Interest Rate as of | 4.31% | 4.26% | |
Total borrowings | $ 400,000 | $ 400,000 | |
Maximum borrowing capacity | $ 400,000 | ||
Term Loan (Maturity Date January 2027) | SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 1.20% | ||
Term Loan (Maturity Date January 2027) | SOFR | Maximum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 1.90% | ||
Term Loan (Maturity Date January 2027) | Interest rate swaps | |||
Debt Instrument [Line Items] | |||
Total borrowings | $ 350,000 | ||
Term Loan (Maturity Date January 2027) | Interest rate caps | |||
Debt Instrument [Line Items] | |||
Total borrowings | $ 50,000 | ||
Fixed-Rate Mortgage Notes | |||
Debt Instrument [Line Items] | |||
Weighted-Average Effective Interest Rate as of | 4.46% | 4.46% | |
Total borrowings | $ 595,660 | $ 596,191 | |
Floating-Rate Mortgage Notes | |||
Debt Instrument [Line Items] | |||
Weighted-Average Effective Interest Rate as of | 5.25% | 5.25% | |
Total borrowings | $ 207,600 | $ 207,600 | |
Floating-Rate Mortgage Notes | SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 1.55% | ||
Floating-Rate Mortgage Notes | SOFR | Maximum | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings spread rate | 2.50% | ||
Floating-Rate Mortgage Notes | Interest rate caps | SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Floating rate | 5.61% | ||
Floating-Rate Mortgage Notes | Interest rate caps | SOFR | Maximum | |||
Debt Instrument [Line Items] | |||
Floating rate | 4.66% |
DEBT (Summary of Borrowings Ref
DEBT (Summary of Borrowings Reflects Contractual Debt Maturities) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) item | Dec. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||
Remainder of 2024 | $ 128,708 | |
2025 | 359,723 | |
2026 | 485,396 | |
2027 | 577,034 | |
2028 | 90,477 | |
Thereafter | 318,999 | |
Total principal payments | 1,960,337 | $ 1,970,791 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | 0 | |
2025 | 357,077 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 0 | |
Total principal payments | $ 357,077 | $ 367,000 |
Term of extension | 6 months | |
Number of extension options | item | 2 | |
Term Loan | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | $ 0 | |
2025 | 0 | |
2026 | 400,000 | |
2027 | 400,000 | |
2028 | 0 | |
Thereafter | 0 | |
Total principal payments | 800,000 | |
Mortgage Notes | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | 128,708 | |
2025 | 2,646 | |
2026 | 85,396 | |
2027 | 177,034 | |
2028 | 90,477 | |
Thereafter | 318,999 | |
Total principal payments | 803,260 | |
Mortgage Notes | Mortgage Note Maturing in October 2024 | ||
Debt Instrument [Line Items] | ||
Total principal payments | $ 127,000 | |
Debt Instrument, Extension Option Period | 1 year | |
Mortgage Notes | Mortgage Note Maturing in January 2027 | ||
Debt Instrument [Line Items] | ||
Total principal payments | $ 115,000 | |
Debt Instrument, Extension Option Period | 1 year | |
Debt Instrument Number Of Extension Of Term Options | item | 2 |
DEBT (Summary of Location and F
DEBT (Summary of Location and Fair Value of Derivative Instruments) (Details) $ in Thousands | Mar. 31, 2024 USD ($) contract | Dec. 31, 2023 USD ($) item contract |
Derivatives, Fair Value [Line Items] | ||
Number of interest rate cap derivative instrument | contract | 17 | 20 |
Total notional amount | $ 1,157,600 | $ 1,157,600 |
Derivative assets | $ 33,643 | $ 32,256 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
Derivative liabilities | $ 0 | $ 0 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Estimated change to interest expense related to active effective hedges of floating rate debt | $ 12,300 | |
Interest rate swaps | Designated hedges | Cash flow hedges | ||
Derivatives, Fair Value [Line Items] | ||
Number of interest rate cap derivative instrument | contract | 9 | 12 |
Total notional amount | $ 550,000 | $ 650,000 |
Derivative assets | $ 11,646 | $ 10,510 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
Derivative liabilities | $ 0 | $ 0 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Interest rate caps | Designated hedges | Cash flow hedges | ||
Derivatives, Fair Value [Line Items] | ||
Number of interest rate cap derivative instrument | contract | 8 | 8 |
Total notional amount | $ 607,600 | $ 507,600 |
Derivative assets | $ 21,997 | $ 21,746 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets. | Other Assets. |
Derivative liabilities | $ 0 | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. | Other Liabilities. |
Interest Rate Cap Expiring in February 2024 | ||
Derivatives, Fair Value [Line Items] | ||
Number of interest rate cap derivative instrument | item | 3 | |
Total notional amount | $ 100,000 | |
Interest Rate Cap Expiring in January 2024 | ||
Derivatives, Fair Value [Line Items] | ||
Total notional amount | $ 100,000 |
DEBT (Effect of Derivative Fina
DEBT (Effect of Derivative Financial Instruments on Financial Statements) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded | $ 44,234 | $ 37,545 |
Unrealized loss on derivative instruments recognized in other income (expenses) | 0 | (1,224) |
Designated hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded | $ 44,234 | 37,545 |
Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized loss on derivative instruments recognized in other income (expenses) | (1,224) | |
Realized gain on derivative instruments recognized in other income (expenses) | $ 1,121 | |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Cash Flow Hedging | Designated hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in AOCI | $ 9,659 | $ (4,000) |
Amount reclassified from AOCI as a decrease into interest expense | $ (4,890) | $ (3,056) |
DST PROGRAM (Loans Outstanding)
DST PROGRAM (Loans Outstanding) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Delaware Statutory Trust Programs [Line Items] | ||
Total | $ 123,182 | $ 117,019 |
DST Program | Carried at cost | ||
Delaware Statutory Trust Programs [Line Items] | ||
Total | $ 103,268 | $ 109,266 |
DST Program | Carried at cost | Weighted Average | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Interest Rate (in %) | 5.20% | 5.10% |
DST Program Loans - Remaining Life (in years) | 8 years | 8 years 4 months 24 days |
DST Program | Carried at fair value | ||
Delaware Statutory Trust Programs [Line Items] | ||
Total | $ 19,914 | $ 7,753 |
DST Program | Carried at fair value | Weighted Average | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Interest Rate (in %) | 6.30% | 6.40% |
DST Program Loans - Remaining Life (in years) | 10 years | 10 years |
DST Program | Total | ||
Delaware Statutory Trust Programs [Line Items] | ||
Total | $ 123,182 | $ 117,019 |
DST Program | Total | Weighted Average | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Interest Rate (in %) | 5.40% | 5.20% |
DST Program Loans - Remaining Life (in years) | 8 years 3 months 18 days | 8 years 6 months |
DST PROGRAM - (Financing Obliga
DST PROGRAM - (Financing Obligations) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Book Value | $ 241,374 | $ 102,045 |
Carried at cost | ||
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Outstanding Liability | 1,169,757 | 1,238,639 |
Financing obligations - Unamortized Program Costs | (932) | (863) |
Financing obligations - Total Appreciation | 11,269 | |
Financing obligations - Book Value | 1,168,825 | 1,249,045 |
Carried at fair value | ||
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Outstanding Liability | 245,127 | 102,977 |
Financing obligations - Unrealized Gain, Net | (3,753) | (932) |
Financing obligations - Book Value | 241,374 | 102,045 |
Total | ||
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Outstanding Liability | 1,414,884 | 1,341,616 |
Financing obligations - Unamortized Program Costs | (932) | (863) |
Financing obligations - Total Appreciation | 11,269 | |
Financing obligations - Unrealized Gain, Net | (3,753) | (932) |
Financing obligations - Book Value | $ 1,410,199 | $ 1,351,090 |
DST PROGRAM (Activity) (Details
DST PROGRAM (Activity) (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Delaware Statutory Trust Programs [Line Items] | ||
(Decrease) increase in financing obligation liability appreciation | $ (69) | $ 2,862 |
Issuances of OP Units for DST Interests | 72,034 | |
Rent obligation incurred under master lease agreements | 32,500 | 28,300 |
Cash payout of DST interests | 3,217 | 0 |
DST Program | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Interests sold | 147,297 | 101,795 |
DST Interests financed by DST Program Loans | 12,161 | 14,015 |
Issuances of OP Units for DST Interests | 72,000 | |
Cash payout of DST interests | 3,200 | 0 |
DST Program | Other Income and expenses | ||
Delaware Statutory Trust Programs [Line Items] | ||
Income earned from DST Program Loans | 1,581 | 1,017 |
DST Program | Interest expense | ||
Delaware Statutory Trust Programs [Line Items] | ||
(Decrease) increase in financing obligation liability appreciation | (69) | 2,862 |
Rent obligation incurred under master lease agreements | $ 16,064 | $ 13,583 |
DST Program | OP Units | ||
Delaware Statutory Trust Programs [Line Items] | ||
Issuance of OP Units (in shares) | 9 | 0 |
FAIR VALUE (Financial Assets an
FAIR VALUE (Financial Assets and Liabilities at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Assets: | ||
Derivative instruments | $ 33,643 | $ 32,256 |
Investments in unconsolidated joint venture partnerships | 34,092 | 0 |
Available-for-sale debt securities | 128,667 | 122,375 |
DST Program Loans | 19,914 | 7,753 |
Liabilities: | ||
Financing obligations | 241,374 | 102,045 |
Recurring | ||
Assets: | ||
Derivative instruments | 33,643 | 32,256 |
Investments in unconsolidated joint venture partnerships | 34,092 | |
Available-for-sale debt securities | 128,667 | 122,375 |
DST Program Loans | 19,914 | 7,753 |
Total assets measured at fair value | 216,316 | 162,384 |
Liabilities: | ||
Financing obligations | 241,374 | 102,045 |
Total liabilities measured at fair value | 241,374 | 102,045 |
Recurring | Level 1 | ||
Assets: | ||
Derivative instruments | 0 | 0 |
Investments in unconsolidated joint venture partnerships | 0 | |
Available-for-sale debt securities | 0 | 0 |
DST Program Loans | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Financing obligations | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
Derivative instruments | 33,643 | 32,256 |
Investments in unconsolidated joint venture partnerships | 0 | |
Available-for-sale debt securities | 17,540 | 14,983 |
DST Program Loans | 0 | 0 |
Total assets measured at fair value | 51,183 | 47,239 |
Liabilities: | ||
Financing obligations | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Recurring | Level 3 | ||
Assets: | ||
Derivative instruments | 0 | 0 |
Investments in unconsolidated joint venture partnerships | 34,092 | |
Available-for-sale debt securities | 111,127 | 107,392 |
DST Program Loans | 19,914 | 7,753 |
Total assets measured at fair value | 165,133 | 115,145 |
Liabilities: | ||
Financing obligations | 241,374 | 102,045 |
Total liabilities measured at fair value | $ 241,374 | $ 102,045 |
FAIR VALUE (Financial Assets Me
FAIR VALUE (Financial Assets Measured at Fair Value on a Recurring Basis) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss | |
Balance as of December 31, 2023 | $ 115,145 |
Purchases and contributions | 45,348 |
Paid-in-kind interest | 3,666 |
Gain on investment | 1,387 |
Foreign currency loss on investment | (482) |
Amortization of loan origination fees | 69 |
Balance as of March 31, 2024 | 165,133 |
Investments In Unconsolidated Joint Venture partnerships | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss | |
Purchases and contributions | 33,187 |
Gain on investment | 1,387 |
Foreign currency loss on investment | (482) |
Balance as of March 31, 2024 | 34,092 |
Available for Sale Debt Securities | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss | |
Balance as of December 31, 2023 | 107,392 |
Paid-in-kind interest | 3,666 |
Amortization of loan origination fees | 69 |
Balance as of March 31, 2024 | 111,127 |
DST Program loans | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss | |
Balance as of December 31, 2023 | 7,753 |
Purchases and contributions | 12,161 |
Balance as of March 31, 2024 | $ 19,914 |
FAIR VALUE (Financial Liabiliti
FAIR VALUE (Financial Liabilities Measured at Fair Value on a Recurring Basis) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Unrealized Gains (Losses) on Financing Obligations |
Financing Obligations | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |
Balance as of December 31, 2023 | $ 102,045 |
DST Interests sold, net of upfront fees | 142,150 |
Unrealized gain on financing obligations | (2,821) |
Balance as of March 31, 2024 | $ 241,374 |
FAIR VALUE (Quantitative Inputs
FAIR VALUE (Quantitative Inputs and Assumptions) (Details) $ in Thousands | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques | ||
Investments in unconsolidated joint venture partnerships | $ 34,092 | $ 0 |
Available-for-sale debt securities | 128,667 | 122,375 |
DST Program Loans | 19,914 | 7,753 |
Financing obligations | 241,374 | 102,045 |
Level 3 | Valuation Yield Method | Measurement Input, Market Yield | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Available-for-sale debt securities | $ 111,127 | $ 107,392 |
Available-for sale debt security (percentage) | 0.133 | 0.133 |
DST Program Loans | $ 19,914 | $ 7,753 |
Level 3 | Valuation Technique, Discounted Cash Flow | Measurement Input, Discount Rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Financing obligations | 241,374 | $ 102,045 |
Level 3 | Valuation Technique, Direct Capitalization | Measurement Input, Discount Rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Investments in unconsolidated joint venture partnerships | $ 34,092 |
FAIR VALUE (Carrying Values and
FAIR VALUE (Carrying Values and Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | ||
DST Program Loans | $ 19,914 | $ 7,753 |
Level 3 | Nonrecurring | Carrying Value | ||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | ||
Debt-related investments | 265,287 | 250,318 |
DST Program Loans | 103,268 | 109,266 |
Line of credit | 357,077 | 367,000 |
Term loans | 800,000 | 800,000 |
Mortgage notes | 803,260 | 803,791 |
Level 3 | Nonrecurring | Fair Value | ||
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation | ||
Debt-related investments | 265,505 | 250,215 |
DST Program Loans | 100,770 | 107,297 |
Line of credit | 357,077 | 367,000 |
Term loans | 800,000 | 800,000 |
Mortgage notes | $ 771,474 | $ 778,235 |
FAIR VALUE (Narrative) (Details
FAIR VALUE (Narrative) (Details) - security | Mar. 31, 2024 | Dec. 31, 2023 |
Preferred equity | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of available for sale debt securities | 1 | 1 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | May 03, 2022 | May 02, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Amount of registration statement offering | $ 10,000,000 | $ 3,000,000 | ||
Issuance of common stock | $ 16,454 | $ 47,691 | ||
Issuance of common stock (in shares) | 2 | |||
Primary offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Amount of registration statement offering | 8,500,000 | |||
DRIP Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Amount of registration statement offering | $ 1,500,000 | |||
Issuance of common stock | $ 8,300 |
EQUITY (Information of Share Tr
EQUITY (Information of Share Transactions) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Redemptions of common stock (in shares) | (4,772) | (4,026) |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 197,228 | 206,108 |
Primary shares (in shares) | 1,001 | 4,459 |
Distribution reinvestment plan (in shares) | 1,028 | 907 |
Redemptions of common stock (in shares) | (4,772) | (4,026) |
Conversions (in shares) | 0 | 0 |
Balance at end of period (in shares) | 194,485 | 207,448 |
Class T | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 28,432 | |
Balance at end of period (in shares) | 28,402 | |
Class T | Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 28,432 | 26,884 |
Primary shares (in shares) | 261 | 1,325 |
Distribution reinvestment plan (in shares) | 160 | 134 |
Redemptions of common stock (in shares) | (375) | (69) |
Conversions (in shares) | (76) | (101) |
Balance at end of period (in shares) | 28,402 | 28,173 |
Class S | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 48,145 | |
Balance at end of period (in shares) | 47,591 | |
Class S | Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 48,145 | 49,237 |
Primary shares (in shares) | 250 | 972 |
Distribution reinvestment plan (in shares) | 270 | 227 |
Redemptions of common stock (in shares) | (1,011) | (561) |
Conversions (in shares) | (63) | 24 |
Balance at end of period (in shares) | 47,591 | 49,899 |
Class D | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 6,930 | |
Balance at end of period (in shares) | 6,875 | |
Class D | Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 6,930 | 7,871 |
Primary shares (in shares) | 37 | 45 |
Distribution reinvestment plan (in shares) | 41 | 40 |
Redemptions of common stock (in shares) | (118) | (240) |
Conversions (in shares) | (15) | (277) |
Balance at end of period (in shares) | 6,875 | 7,439 |
Class I | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 65,511 | |
Balance at end of period (in shares) | 64,462 | |
Class I | Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 65,511 | 69,142 |
Primary shares (in shares) | 453 | 2,117 |
Distribution reinvestment plan (in shares) | 371 | 331 |
Redemptions of common stock (in shares) | (2,027) | (2,557) |
Conversions (in shares) | 154 | 354 |
Balance at end of period (in shares) | 64,462 | 69,387 |
Class E | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 48,210 | |
Balance at end of period (in shares) | 47,155 | |
Class E | Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance at beginning of period (in shares) | 48,210 | 52,974 |
Primary shares (in shares) | 0 | 0 |
Distribution reinvestment plan (in shares) | 186 | 175 |
Redemptions of common stock (in shares) | (1,241) | (599) |
Conversions (in shares) | 0 | 0 |
Balance at end of period (in shares) | 47,155 | 52,550 |
EQUITY (Total Distributions Dec
EQUITY (Total Distributions Declared and Portion of Each Contribution Paid in Cash and Reinvested) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | |
EQUITY | ||||||
Declared per Common Share (usd per share) | $ 0.10000 | $ 0.10000 | $ 0.10000 | $ 0.09375 | $ 0.09375 | $ 0.38750 |
Common Stock Distributions Paid in Cash | $ 10,013 | $ 10,127 | $ 10,335 | $ 9,896 | $ 9,912 | $ 40,270 |
Other Cash Distributions | 8,577 | 7,739 | 6,451 | 5,510 | 5,271 | 24,971 |
Reinvested in Shares | 8,238 | 8,317 | 8,431 | 7,974 | 8,009 | 32,731 |
Distribution Fees | 1,317 | 1,387 | 1,430 | 1,463 | 1,461 | 5,741 |
Gross Distributions | $ 28,145 | $ 27,570 | $ 26,647 | $ 24,843 | $ 24,653 | $ 103,713 |
EQUITY (Redemptions and Repurch
EQUITY (Redemptions and Repurchases Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
EQUITY | ||
Number of shares redeemed or repurchased (in shares) | 4,772 | 4,026 |
Aggregate dollar amount of shares redeemed or repurchased | $ 38,349 | $ 35,455 |
Average redemption or repurchase price per share (usd per share) | $ 8.04 | $ 8.81 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS (Schedule of Redeemable Noncontrolling Interest Activity) (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Redeemable Noncontrolling Interest | |||
Beginning balance | $ 11,746 | $ 18,130 | |
Distributions to redeemable noncontrolling interests | (144) | (192) | |
Net loss attributable to redeemable noncontrolling interests | 111 | 18 | |
Change from securities and cash flow hedging activities attributable to redeemable noncontrolling interests | 24 | (55) | |
Redemption value allocation adjustment to redeemable noncontrolling interests | (200) | (74) | |
Ending balance | $ 11,315 | $ 17,791 | |
OP Units | |||
Redeemable Noncontrolling Interest | |||
Redeemable OP units outstanding | 1.4 | 1.4 |
NONCONTROLLING INTERESTS (Summa
NONCONTROLLING INTERESTS (Summary of Balances) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Noncontrolling Interest | ||
Issuance of units (in shares) | 2,000 | |
Redemptions of units (in shares) | (4,772) | (4,026) |
OP Units | ||
Noncontrolling Interest | ||
Balance at beginning of period (in shares) | 78,737 | 55,079 |
Issuance of units (in shares) | 8,976 | |
Redemptions of units (in shares) | (1,009) | (1,240) |
Balance at end of period (in shares) | 86,704 | 53,839 |
NONCONTROLLING INTERESTS (Narra
NONCONTROLLING INTERESTS (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Noncontrolling Interest | |||
Aggregate amount of OP Units redeemed | $ 38,349 | $ 35,455 | |
OP Units | |||
Noncontrolling Interest | |||
Number of common stock issued per operating partnership unit | 1 | ||
Aggregate amount of OP Units redeemed | $ 8,100 | $ 10,900 | |
OP Units | Maximum | |||
Noncontrolling Interest | |||
Estimated maximum redemption value | $ 680,100 | $ 641,100 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Related Party Transaction | |||
Other liabilities | $ 32,949 | $ 33,913 | |
Future Estimated Distribution Fees Payable | 64,217 | 66,656 | |
Related Party | |||
Related Party Transaction | |||
Related party transaction expense | 21,162 | $ 20,401 | |
Other liabilities | 9,616 | 8,727 | |
Related Party | Advisor | |||
Related Party Transaction | |||
Amount reimbursed for services | 3,400 | 2,800 | |
Related Party | Selling commissions and dealer manager fees | Advisor | |||
Related Party Transaction | |||
Related party transaction expense | 101 | 512 | |
Related Party | Ongoing distribution fees | Dealer Manager | |||
Related Party Transaction | |||
Related party transaction expense | 2,286 | 2,154 | |
Other liabilities | 772 | 804 | |
Related Party | Ongoing distribution fees | Dealer Manager | Other Liabilities | |||
Related Party Transaction | |||
Future Estimated Distribution Fees Payable | 64,200 | 66,700 | |
Related Party | Advisory fees-fixed component | Advisor | |||
Related Party Transaction | |||
Related party transaction expense | 9,972 | 9,538 | |
Other liabilities | 3,304 | 3,281 | |
Related Party | Other fees and expense reimbursements-Advisor | Advisor | |||
Related Party Transaction | |||
Related party transaction expense | 3,683 | 3,106 | |
Other liabilities | 4,495 | 3,909 | |
Related Party | Other fees and expense reimbursements-Advisor | Dealer Manager | |||
Related Party Transaction | |||
Related party transaction expense | 40 | ||
Other liabilities | 355 | 84 | |
Related Party | Property accounting fee | Dealer Manager | |||
Related Party Transaction | |||
Related party transaction expense | 477 | 489 | |
Other liabilities | 160 | 170 | |
Related Party | Performance Participation Allocation | Advisor | |||
Related Party Transaction | |||
Related party transaction expense | 0 | 0 | |
Related Party | DST Program selling commissions, dealer manager and distribution fees | Dealer Manager | |||
Related Party Transaction | |||
Related party transaction expense | 2,351 | 2,671 | |
Other liabilities | 359 | 308 | |
Related Party | Other DST Program Related Costs [Member] | Advisor | |||
Related Party Transaction | |||
Related party transaction expense | 2,252 | $ 1,931 | |
Other liabilities | $ 171 | $ 171 |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
NET INCOME (LOSS) PER COMMON SHARE | ||
Net loss attributable to common stockholders-basic | $ (15,001) | $ (2,004) |
Net loss attributable to redeemable noncontrolling interests | (111) | (18) |
Net loss attributable to noncontrolling interests | 6,477 | 549 |
Net loss attributable to common stockholders-diluted | $ (21,589) | $ (2,571) |
Weighted-average shares outstanding-basic (in shares) | 195,679 | 206,774 |
Incremental weighted-average shares effect of conversion of noncontrolling interests (in shares) | 85,694 | 56,252 |
Weighted-average shares outstanding - diluted (in shares) | 281,373 | 263,026 |
Basic (in $ per share) | $ (0.08) | $ (0.01) |
Diluted (in $ per share) | $ (0.08) | $ (0.01) |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Supplemental disclosure of non-cash investing and financing activities: | ||||
Distributions reinvested in common stock | $ 8,275 | $ 7,990 | ||
Decrease in accrued future ongoing distribution fees | (2,439) | (1,800) | ||
Increase in DST Program Loans receivable through DST Program capital raising | 12,161 | 14,015 | ||
Issuances of OP Units for DST Interests | 72,034 | 0 | ||
Supplemental Cash Flow Information [Abstract] | ||||
Cash and cash equivalents | 15,739 | 36,894 | $ 15,052 | $ 13,336 |
Restricted cash | 4,184 | 3,859 | 4,614 | 3,850 |
Cash, cash equivalents and restricted cash | $ 19,923 | $ 40,753 | $ 19,666 | $ 17,186 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Mar. 31, 2024 USD ($) |
COMMITMENTS AND CONTINGENCIES. | |
Unfunded commitments | $ 273 |
SEGMENT FINANCIAL INFORMATION_2
SEGMENT FINANCIAL INFORMATION (Schedule of Total Assets by Business Segment) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) segment | Dec. 31, 2023 USD ($) | |
Segment Reporting, Asset Reconciling Item | ||
Number of reportable segments | segment | 6 | |
Total assets | $ 4,681,667 | $ 4,639,406 |
Operating Segments | Office properties | ||
Segment Reporting, Asset Reconciling Item | ||
Total assets | 365,646 | 373,467 |
Operating Segments | Retail properties | ||
Segment Reporting, Asset Reconciling Item | ||
Total assets | 507,138 | 509,307 |
Operating Segments | Residential properties | ||
Segment Reporting, Asset Reconciling Item | ||
Total assets | 1,655,860 | 1,658,945 |
Operating Segments | Industrial properties | ||
Segment Reporting, Asset Reconciling Item | ||
Total assets | 1,342,961 | 1,353,331 |
Operating Segments | Other properties | ||
Segment Reporting, Asset Reconciling Item | ||
Total assets | 54,764 | 55,130 |
Operating Segments | Investments in real estate debt and securities | ||
Segment Reporting, Asset Reconciling Item | ||
Total assets | 391,442 | 370,176 |
Corporate | ||
Segment Reporting, Asset Reconciling Item | ||
Total assets | $ 363,856 | $ 319,050 |
SEGMENT FINANCIAL INFORMATION_3
SEGMENT FINANCIAL INFORMATION (Reconciliation of Net Operating Income to Reported Net Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Reconciliation of reported net income (loss) attributable to common stockholders to net operating income | ||
Net loss attributable to common stockholders | $ (15,001) | $ (2,004) |
Real estate-related depreciation and amortization | 35,470 | 33,197 |
General and administrative expenses | 3,337 | 3,044 |
Advisory fees | 9,972 | 9,538 |
Acquisition costs and reimbursements | 2,043 | 1,169 |
Valuation allowance on debt-related investment | 0 | 2,520 |
(Income) loss from unconsolidated joint venture partnerships | (2,282) | 2,446 |
Interest expense | 44,234 | 37,545 |
Gain on sale of real estate property | 0 | (36,884) |
Unrealized gain on financing obligations | (2,821) | 0 |
Loss on extinguishment of debt and financing commitments, net | 0 | 700 |
Loss on derivative instruments | 103 | |
Provision for current expected credit losses | (133) | 5,630 |
Other income and expenses | (1,289) | (1,016) |
Net loss attributable to redeemable noncontrolling interests | 111 | 18 |
Net loss attributable to noncontrolling interests | 6,477 | 549 |
Net operating income | $ 66,942 | $ 55,421 |
SEGMENT FINANCIAL INFORMATION_4
SEGMENT FINANCIAL INFORMATION (Revenue and Components of Net Operating Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information | ||
Rental revenues | $ 88,131 | $ 77,960 |
Debt-related income | 11,311 | 5,761 |
Rental expenses | (32,500) | (28,300) |
Net operating income | 66,942 | 55,421 |
Real estate-related depreciation and amortization | 35,470 | 33,197 |
Office | ||
Segment Reporting Information | ||
Rental revenues | 12,194 | 13,349 |
Rental expenses | (6,355) | (6,630) |
Net operating income | 5,839 | 6,719 |
Real estate-related depreciation and amortization | 3,967 | 3,963 |
Retail | ||
Segment Reporting Information | ||
Rental revenues | 15,469 | 14,518 |
Rental expenses | (3,952) | (3,584) |
Net operating income | 11,517 | 10,934 |
Real estate-related depreciation and amortization | 3,958 | 4,035 |
Residential | ||
Segment Reporting Information | ||
Rental revenues | 33,085 | 28,848 |
Rental expenses | (15,672) | (13,190) |
Net operating income | 17,413 | 15,658 |
Real estate-related depreciation and amortization | 12,181 | 9,489 |
Industrial | ||
Segment Reporting Information | ||
Rental revenues | 26,455 | 21,245 |
Rental expenses | (6,170) | (4,896) |
Net operating income | 20,285 | 16,349 |
Real estate-related depreciation and amortization | 14,842 | 15,710 |
Other Investments | ||
Segment Reporting Information | ||
Rental revenues | 928 | |
Rental expenses | (351) | |
Net operating income | 577 | |
Real estate-related depreciation and amortization | 522 | |
Debt and Securities | ||
Segment Reporting Information | ||
Debt-related income | 11,311 | 5,761 |
Net operating income | $ 11,311 | $ 5,761 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (15,001) | $ (2,004) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
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 |