Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 06, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-56032 | |
Entity Registrant Name | Ares Industrial Real Estate Income Trust Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 47-1592886 | |
Entity Address, Address Line One | One Tabor Center | |
Entity Address, Address Line Two | 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 | 0001625941 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class T Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 107,245,100 | |
Class D Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 19,147,798 | |
Class I Shares | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 144,414,734 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
ASSETS | ||
Net investment in real estate properties | $ 6,643,148 | $ 6,753,978 |
Investment in unconsolidated joint venture partnership | 20,563 | 20,511 |
Investments in real estate debt and securities, at fair value | 356,597 | 184,755 |
Cash and cash equivalents | 31,431 | 14,322 |
Restricted cash | 3,091 | 620 |
Derivative instruments | 92,679 | 83,531 |
DST Program Loans (includes $10,466 and $2,439 at fair value as of June 30, 2024 and December 31, 2023, respectively) | 137,466 | 202,715 |
Other assets | 81,649 | 69,072 |
Total assets | 7,366,624 | 7,329,504 |
Liabilities | ||
Accounts payable and accrued liabilities | 77,976 | 101,013 |
Debt, net | 3,728,496 | 3,421,181 |
Secured financings on investments in real estate debt securities | 106,799 | 42,298 |
Intangible lease liabilities, net | 69,333 | 75,141 |
Financing obligations, net (includes $197,504 and $87,145 at fair value as of June 30, 2024 and December 31, 2023, respectively) | 1,253,684 | 1,658,634 |
Distribution fees payable to affiliates | 86,864 | 64,517 |
Other liabilities | 55,845 | 57,176 |
Total liabilities | 5,378,997 | 5,419,960 |
Commitments and contingencies (Note 14) | ||
Redeemable noncontrolling interests | 107,992 | 114,310 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value - 200,000 shares authorized, none issued and outstanding | ||
Additional paid-in capital | 2,848,494 | 2,850,329 |
Accumulated deficit and distributions | (1,224,905) | (1,094,009) |
Accumulated other comprehensive income | 46,147 | 35,716 |
Total stockholders' equity | 1,672,469 | 1,794,922 |
Noncontrolling interests | 207,166 | 312 |
Total equity | 1,879,635 | 1,795,234 |
Total liabilities and equity | 7,366,624 | 7,329,504 |
Class T Shares | ||
Stockholders' equity: | ||
Common stock, value | 1,131 | 1,628 |
Class D Shares | ||
Stockholders' equity: | ||
Common stock, value | 194 | 204 |
Class I Shares | ||
Stockholders' equity: | ||
Common stock, value | $ 1,408 | $ 1,054 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
DST Program Loans, fair value | $ 10,466 | $ 2,439 |
Financing obligations | $ 197,504 | $ 87,145 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class T Shares | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,200,000 | 1,200,000 |
Common stock, shares issued | 113,066 | 162,838 |
Common stock, shares outstanding | 113,066 | 162,838 |
Class D Shares | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 19,371 | 20,410 |
Common stock, shares outstanding | 19,371 | 20,410 |
Class I Shares | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 225,000 | 225,000 |
Common stock, shares issued | 140,838 | 105,358 |
Common stock, shares outstanding | 140,838 | 105,358 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues: | ||||
Rental revenues | $ 122,077 | $ 112,643 | $ 242,341 | $ 224,219 |
Debt-related income | 7,709 | 1,146 | 12,843 | 2,214 |
Total revenues | 129,786 | 113,789 | 255,184 | 226,433 |
Operating expenses: | ||||
Rental expenses | 31,139 | 27,566 | 60,982 | 54,744 |
Real estate-related depreciation and amortization | 72,216 | 72,009 | 144,446 | 144,340 |
General and administrative expenses | 4,749 | 3,943 | 9,224 | 8,070 |
Advisory fees | 16,495 | 18,965 | 33,502 | 38,219 |
Acquisition costs and reimbursements | 642 | 412 | 1,196 | 8,731 |
Total operating expenses | 125,241 | 122,895 | 249,350 | 254,104 |
Other income (expenses): | ||||
Equity in income (loss) from unconsolidated joint venture partnership | 18 | (63) | 25 | (139) |
Interest expense | (63,448) | (49,971) | (119,149) | (98,435) |
Unrealized gain on financing obligations | 95 | 2,100 | ||
Unrealized loss on DST Program Loans | (245) | (245) | ||
Gain on derivative instruments | 677 | 7,236 | 2,996 | 5,652 |
Net gain on sale of real estate property | 6,187 | 43,529 | ||
Other income and expenses | 2,227 | 2,311 | 4,798 | 4,525 |
Total other income (expenses) | (54,489) | (40,487) | (65,946) | (88,397) |
Net loss | (49,944) | (49,593) | (60,112) | (116,068) |
Net loss attributable to redeemable noncontrolling interests | 1,304 | 1,346 | 1,586 | 3,018 |
Net loss (income) attributable to noncontrolling interests | 5,270 | (10) | 5,478 | (19) |
Net loss attributable to common stockholders | $ (43,370) | $ (48,257) | $ (53,048) | $ (113,069) |
Weighted-average shares outstanding-basic (in shares) | 277,521 | 309,616 | 281,755 | 311,543 |
Weighted-average shares outstanding-diluted (in shares) | 319,660 | 318,254 | 310,209 | 319,909 |
Net loss attributable to common stockholders per common share - basic (in dollars per share) | $ (0.16) | $ (0.16) | $ (0.19) | $ (0.36) |
Net loss attributable to common stockholders per common share - diluted (in dollars per share) | $ (0.16) | $ (0.16) | $ (0.19) | $ (0.36) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (49,944) | $ (49,593) | $ (60,112) | $ (116,068) |
Change from cash flow hedging activities | (865) | 20,571 | 17,515 | 263 |
Change from activities related to available-for-sale debt securities | (515) | 636 | (42) | 387 |
Comprehensive loss | (51,324) | (28,386) | (42,639) | (115,418) |
Comprehensive loss attributable to redeemable noncontrolling interests | 1,340 | 770 | 1,099 | 2,959 |
Comprehensive loss attributable to noncontrolling interests | 5,416 | 5,221 | ||
Comprehensive loss attributable to common stockholders | $ (44,568) | $ (27,616) | $ (36,319) | $ (112,459) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Beginning balance at Dec. 31, 2022 | $ 3,145 | $ 3,219,132 | $ (739,497) | $ 70,255 | $ 312 | $ 2,553,347 |
Beginning balance, shares at Dec. 31, 2022 | 314,544 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income (excludes income attributable to redeemable noncontrolling interests) | (113,069) | 19 | (113,050) | |||
Change from cash flow hedging activities and available-for-sale debt securities (excludes attributable to redeemable noncontrolling interests) | 591 | 591 | ||||
Issuance of common stock | $ 119 | 180,362 | 180,481 | |||
Issuance of common stock, shares | 11,919 | |||||
Share-based compensation, net of cancellations | 1,331 | 1,331 | ||||
Share-based compensation, net of cancellations (shares) | (49) | |||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (5,105) | (5,105) | ||||
Trailing distribution fees | (1,325) | 13,150 | 11,825 | |||
Redemptions of common stock | $ (186) | (280,753) | $ (280,939) | |||
Redemptions of common stock, shares | (18,609) | (18,609) | ||||
Distributions declared (excludes attributable to redeemable noncontrolling interests) | (84,934) | (19) | $ (84,953) | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | 911 | 911 | ||||
Ending balance at Jun. 30, 2023 | $ 3,078 | 3,114,553 | (924,350) | 70,846 | 312 | 2,264,439 |
Ending balance, shares at Jun. 30, 2023 | 307,805 | |||||
Beginning balance at Mar. 31, 2023 | $ 3,125 | 3,183,710 | (840,246) | 50,215 | 312 | 2,397,116 |
Beginning balance, shares at Mar. 31, 2023 | 312,522 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income (excludes income attributable to redeemable noncontrolling interests) | (48,257) | 10 | (48,247) | |||
Change from cash flow hedging activities and available-for-sale debt securities (excludes attributable to redeemable noncontrolling interests) | 20,631 | 20,631 | ||||
Issuance of common stock | $ 50 | 76,641 | 76,691 | |||
Issuance of common stock, shares | 5,033 | |||||
Share-based compensation, net of cancellations | 702 | 702 | ||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (2,153) | (2,153) | ||||
Trailing distribution fees | (346) | 6,344 | 5,998 | |||
Redemptions of common stock | $ (97) | (145,854) | (145,951) | |||
Redemptions of common stock, shares | (9,750) | |||||
Distributions declared (excludes attributable to redeemable noncontrolling interests) | (42,191) | (10) | (42,201) | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | 1,853 | 1,853 | ||||
Ending balance at Jun. 30, 2023 | $ 3,078 | 3,114,553 | (924,350) | 70,846 | 312 | 2,264,439 |
Ending balance, shares at Jun. 30, 2023 | 307,805 | |||||
Beginning balance at Dec. 31, 2023 | $ 2,886 | 2,850,329 | (1,094,009) | 35,716 | 312 | 1,795,234 |
Beginning balance, shares at Dec. 31, 2023 | 288,606 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income (excludes income attributable to redeemable noncontrolling interests) | (53,048) | (5,478) | (58,526) | |||
Change from cash flow hedging activities and available-for-sale debt securities (excludes attributable to redeemable noncontrolling interests) | 16,729 | 257 | 16,986 | |||
Issuance of common stock | $ 65 | 82,214 | $ 82,279 | |||
Issuance of common stock, shares | 6,500 | 6,300 | ||||
Share-based compensation, net of cancellations | $ (1) | 950 | $ 949 | |||
Share-based compensation, net of cancellations (shares) | (78) | |||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (3,067) | (3,067) | ||||
Trailing distribution fees | 3,363 | 6,678 | (32,390) | (22,349) | ||
Redemptions of common stock | $ (217) | (278,955) | $ (279,172) | |||
Redemptions of common stock, shares | (21,753) | (21,753) | ||||
Issuances of OP Units for DST Interests | 436,174 | $ 436,174 | ||||
Distributions declared (excludes attributable to redeemable noncontrolling interests) | (84,526) | (6,062) | (90,588) | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | 1,715 | 1,715 | ||||
Reallocation of stockholders' equity and noncontrolling interests | 191,945 | (6,298) | (185,647) | |||
Ending balance at Jun. 30, 2024 | $ 2,733 | 2,848,494 | (1,224,905) | 46,147 | 207,166 | 1,879,635 |
Ending balance, shares at Jun. 30, 2024 | 273,275 | |||||
Beginning balance at Mar. 31, 2024 | $ 2,841 | 2,851,223 | (1,142,991) | 52,465 | 60,788 | 1,824,326 |
Beginning balance, shares at Mar. 31, 2024 | 284,071 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income (excludes income attributable to redeemable noncontrolling interests) | (43,370) | (5,270) | (48,640) | |||
Change from cash flow hedging activities and available-for-sale debt securities (excludes attributable to redeemable noncontrolling interests) | (1,197) | (146) | (1,343) | |||
Issuance of common stock | $ 32 | 39,835 | 39,867 | |||
Issuance of common stock, shares | 3,167 | |||||
Share-based compensation, net of cancellations | 776 | 776 | ||||
Share-based compensation, net of cancellations (shares) | (4) | |||||
Upfront offering costs, including selling commissions, dealer manager fees, and offering costs | (1,336) | (1,336) | ||||
Trailing distribution fees | 2,571 | 3,082 | (23,389) | (17,736) | ||
Redemptions of common stock | $ (140) | (176,180) | (176,320) | |||
Redemptions of common stock, shares | (13,959) | |||||
Issuances of OP Units for DST Interests | 307,321 | 307,321 | ||||
Distributions declared (excludes attributable to redeemable noncontrolling interests) | (41,626) | (5,079) | (46,705) | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | (575) | (575) | ||||
Reallocation of stockholders' equity and noncontrolling interests | 132,180 | (5,121) | (127,059) | |||
Ending balance at Jun. 30, 2024 | $ 2,733 | $ 2,848,494 | $ (1,224,905) | $ 46,147 | $ 207,166 | $ 1,879,635 |
Ending balance, shares at Jun. 30, 2024 | 273,275 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Net loss attributable to redeemable noncontrolling interests | $ 1,304 | $ 1,346 | $ 1,586 | $ 3,018 |
Change from cash flow hedging activities and available-for-sale securities attributable to redeemable noncontrolling interest | (37) | 576 | 487 | 59 |
Distributions to redeemable noncontrolling interest | $ 1,252 | $ 1,177 | $ 2,504 | $ 2,284 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Operating activities: | ||
Net loss | $ (60,112) | $ (116,068) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Real estate-related depreciation and amortization | 144,446 | 144,340 |
Amortization of deferred financing costs | 6,037 | 4,899 |
(Decrease) increase in financing obligation liability appreciation | (6,664) | 7,414 |
Equity in (income) loss from unconsolidated joint venture partnership | (25) | 139 |
Loss on changes in fair value of interest rate caps | 7,296 | 2,870 |
Amortization of interest rate cap premiums | 5,135 | |
Unrealized gain on financing obligations | (2,100) | |
Unrealized loss on DST Program Loans | 245 | |
Straight-line rent and amortization of above- and below-market leases | (16,298) | (17,749) |
Net gain on sale of real estate property | (43,529) | |
Forfeited investment deposit | 7,689 | |
Other | 48 | 2,212 |
Changes in operating assets and liabilities | ||
Other assets, accounts payable and accrued expenses and other liabilities | (7,509) | 5,048 |
Cash settlement of accrued performance participation allocation | (77,838) | |
Net cash provided by (used in) operating activities | 26,970 | (37,044) |
Investing activities: | ||
Real estate acquisitions | (148,804) | (40,081) |
Proceeds from disposition of real estate properties | 207,822 | |
Capital expenditures | (69,452) | (116,796) |
Investments in debt-related investments | (76,547) | |
Investment in unconsolidated joint venture partnership | (26) | (556) |
Purchases of available-for-sale debt securities | (94,437) | |
Collection of principal on available-for-sale debt securities | 1,848 | 692 |
Other | 952 | 65 |
Net cash used in investing activities | (178,644) | (156,676) |
Financing activities: | ||
Proceeds from line of credit | 480,000 | 315,000 |
Repayments of line of credit | (962,000) | (125,000) |
Net proceeds from (repayments of) secured funding agreement | 64,501 | |
Proceeds from mortgage note | 799,458 | |
Debt issuance costs paid | (16,851) | (358) |
Interest rate cap premiums | (4,738) | (8,563) |
Proceeds from issuance of common stock, net | 36,925 | 136,206 |
Proceeds from financing obligations, net | 104,186 | 179,862 |
Offering costs paid in connection with issuance of common stock and private placements | (2,553) | (3,231) |
Distributions paid to common stockholders, redeemable noncontrolling interest holders and noncontrolling interest holders | (39,563) | (32,665) |
Distribution fees paid to affiliates | (7,939) | (13,602) |
Redemptions of common stock | (279,172) | (280,939) |
Redemptions of redeemable noncontrolling interests | (1,000) | |
Net cash provided by financing activities | 171,254 | 166,710 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 19,580 | (27,010) |
Cash, cash equivalents and restricted cash, at beginning of period | 14,942 | 80,023 |
Cash, cash equivalents and restricted cash, at end of period | $ 34,522 | $ 53,013 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2024 | |
BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Ares Industrial Real Estate Income Trust Inc. (the “Company,” “we,” “our” or “us”) is a Maryland corporation formed on August 12, 2014. Unless the context otherwise requires, the “Company,” “we,” “our,” “us” and “AIREIT” refers to Ares Industrial Real Estate Income Trust Inc. and our consolidated subsidiaries, which includes AIREIT Operating Partnership LP (the “Operating Partnership”). 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 8, 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassifications Certain items in our condensed consolidated statements of cash flows for the six months ended June 30, 2023 have been reclassified to conform to the 2024 presentation. Noncontrolling Interests Tr |
INVESTMENTS IN REAL ESTATE PROP
INVESTMENTS IN REAL ESTATE PROPERTIES | 6 Months Ended |
Jun. 30, 2024 | |
INVESTMENTS IN REAL ESTATE PROPERTIES [Abstract] | |
INVESTMENTS IN REAL ESTATE PROPERTIES | 3. INVESTMENTS IN REAL ESTATE PROPERTIES As of June 30, 2024 and December 31, 2023, our consolidated investment in real estate properties consisted of 250 and 256 industrial buildings, respectively. Additionally, investment in real estate properties included one building under construction and one building in the pre-construction phase as of both June 30, 2024 and December 31, 2023. As of (in thousands) June 30, 2024 December 31, 2023 Land $ 1,298,884 $ 1,300,059 Building and improvements (1) 5,578,091 5,486,636 Intangible lease assets 505,774 498,053 Construction in progress 137,410 219,659 Investment in real estate properties 7,520,159 7,504,407 Less accumulated depreciation and amortization (877,011) (750,429) Net investment in real estate properties $ 6,643,148 $ 6,753,978 (1) Includes site improvements. Acquisitions During the six months ended June 30, 2024, we acquired 100% of the following properties, which were determined to be asset acquisitions: Number of Total Purchase ($ in thousands) Acquisition Date Buildings Price (1) 2024 Acquisitions: Plainfield Distribution Center I&II 4/8/2024 2 $ 78,087 Baymeadow Commerce Center 5/9/2024 1 18,051 Nashville Logistics Center 6/27/2024 1 52,811 Total Acquisitions 4 $ 148,949 (1) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2024 acquisitions. During the six months ended June 30, 2024, we allocated the purchase price of our acquisitions to land, building and improvements, construction in progress, and intangible lease assets and liabilities as follows: For the Six Months Ended (in thousands) June 30, 2024 Land $ 24,212 Building and improvements (1) 115,403 Intangible lease assets 13,007 Below-market lease liabilities (3,673) Total purchase price (2) $ 148,949 (1) Includes site improvements. (2) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2024 acquisitions. The weighted-average amortization period for the intangible lease assets and liabilities acquired in connection with our acquisitions during the six months ended June 30, 2024, as of the respective date of each acquisition, was 2.7 years. Dispositions During the six months ended June 30, 2024, we sold ten industrial buildings for aggregate net proceeds of approximately $207.8 million. We recorded a net gain on sale of approximately $43.5 million. Intangible Lease Assets and Liabilities Intangible lease assets and liabilities as of June 30, 2024 and December 31, 2023 included the following: As of June 30, 2024 As of December 31, 2023 Accumulated Accumulated (in thousands) Gross Amortization Net Gross Amortization Net Intangible lease assets (1) $ 493,429 $ (274,578) $ 218,851 $ 485,184 $ (243,878) $ 241,306 Above-market lease assets (1) 12,345 (6,547) 5,798 12,869 (5,916) 6,953 Below-market lease liabilities (132,467) 63,134 (69,333) (129,823) 54,682 (75,141) (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 June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Increase (Decrease) to Rental Revenue: Straight-line rent adjustments $ 4,009 $ 4,117 $ 8,224 $ 7,215 Above-market lease amortization (417) (530) (856) (1,083) Below-market lease amortization 4,414 5,342 8,930 11,617 Real Estate-Related Depreciation and Amortization: Depreciation expense $ 54,758 $ 51,472 $ 108,516 $ 101,907 Intangible lease asset amortization 17,458 20,537 35,930 42,433 |
INVESTMENTS IN REAL ESTATE DEBT
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES | 6 Months Ended |
Jun. 30, 2024 | |
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES [Abstract] | |
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES | 4. INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES Debt-Related Investments Our debt-related investments consist of floating-rate senior loans secured by real estate, which we acquire for investment purposes. The following table summarizes our debt-related investments as of June 30, 2024: ($ in thousands) As of June 30, 2024 Loan Type Property Type Location Origination Date Total Commitment Outstanding Principal Fair Value Interest Rate Maturity Date (1) Senior Industrial TX July 2023 $ 60,860 $ 49,289 $ 49,289 9.18 % Aug 2025 Senior Industrial NY August 2023 113,910 101,897 101,897 8.83 Sept 2026 Senior Industrial TX January 2024 36,404 19,921 19,921 10.08 Feb 2027 Senior Industrial NC April 2024 38,350 37,000 37,000 8.58 Apr 2027 Total / weighted-average $ 249,524 $ 208,107 $ 208,107 9.00 % (1) The weighted-average remaining term of our debt-related investments was approximately 2.1 years as of June 30, 2024. The following table summarizes our debt-related investments as of December 31, 2023: ($ in thousands) As of December 31, 2023 Loan Type Property Type Location Origination Date Total Commitment Outstanding Principal Fair Value Interest Rate Maturity Date (1) Senior Industrial TX July 2023 $ 60,860 $ 29,700 $ 29,700 9.21 % Aug 2025 Senior Industrial NY August 2023 113,910 99,423 99,423 8.86 Sept 2026 Total / weighted-average $ 174,770 $ 129,123 $ 129,123 8.94 % (1) The weighted-average remaining term of our debt-related investments was approximately 2.5 years as of December 31, 2023. Available-for-Sale Debt Securities As of June 30, 2024 and December 31, 2023, we had debt security investments designated as available-for-sale debt securities. The weighted-average remaining term of our available-for-sale debt securities, which is based on the fully extended maturity date of the instruments, was approximately 4.0 years and 3.2 years as of June 30, 2024 and December 31, 2023, respectively. There were no credit losses associated with our available-for-sale debt securities as of June 30, 2024 or December 31, 2023. The following table summarizes our investments in available-for-sale debt securities as of June 30, 2024 and December 31, 2023: ($ in thousands) Face Amount (1) Amortized Cost Unamortized Discount Unrealized Gain, Net (2) Fair Value As of June 30, 2024 $ 150,152 $ 148,086 $ 2,066 $ 404 $ 148,490 As of December 31, 2023 $ 57,326 $ 55,186 $ 2,140 $ 446 $ 55,632 (1) Face amount is presented net of repayments. (2) Represents cumulative unrealized gain (loss) beginning from acquisition date. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2024 | |
DEBT [Abstract] | |
DEBT | 5. DEBT Our consolidated indebtedness is currently comprised of borrowings under our line of credit, term loans and mortgage notes. Borrowings under the non-recourse mortgage notes are secured by mortgages or deeds of trust and related assignments and security interests in collateralized and certain cross-collateralized properties, which are generally owned by single purpose entities. A summary of our debt is as follows: Weighted-Average Effective Interest Rate as of Balance as of June 30, December 31, June 30, December 31, ($ in thousands) 2024 2023 Maturity Date 2024 2023 Line of credit (1) 3.67 % 6.20 % March 2025 $ 88,000 $ 570,000 Term loan (2) 3.54 3.35 March 2027 550,000 550,000 Term loan (3) 3.47 3.42 May 2026 600,000 600,000 Fixed-rate mortgage notes (4) 4.01 3.58 August 2024 - 1,200,720 996,720 Floating-rate mortgage notes (5) 5.54 4.48 January 2025 - 1,323,896 725,605 Total principal amount / weighted-average (6) 4.38 % 4.17 % $ 3,762,616 $ 3,442,325 Less unamortized debt issuance costs (34,230) (21,359) Add unamortized mark-to-market adjustment on assumed debt 110 215 Total debt, net $ 3,728,496 $ 3,421,181 Gross book value of properties encumbered by debt $ 3,835,742 $ 2,596,052 (1) The effective interest rate is calculated based on either (i) the Term Secured Overnight Financing Rate (“Term SOFR”) plus a 10 basis point adjustment (“Adjusted Term SOFR”) plus a margin ranging from 1.25% to 2.00% ; or (ii) an alternative base rate plus a margin ranging from 0.25% to 1.0% , each depending on our consolidated leverage ratio. Customary fall-back provisions apply if Term SOFR is unavailable. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate cap agreements. The line of credit is available for general corporate purposes including, but not limited to, our acquisition and operation of permitted investments. As of June 30, 2024, total commitments for the line of credit were $1.0 billion and the unused portion under the line of credit was $912.0 million, of which $484.3 million was available. (2) The effective interest rate is calculated based on either (i) Adjusted Term SOFR plus a margin ranging from 1.20% to 1.90% ; or (ii) an alternative base rate plus a margin ranging from 0.20% to 0.90% , depending on our consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements which fix Term SOFR for $200.0 million of borrowings and interest rate cap agreements on $350.0 million of borrowings under the term loan. As of June 30, 2024, total commitments for the term loan were $550.0 million. This term loan is available for general corporate purposes including, but not limited to, our acquisition and operation of permitted investments. (3) The effective interest rate is calculated based on Term SOFR plus a 11.448 basis point adjustment plus a margin ranging from 1.35% to 2.20% ; or (ii) an alternative base rate plus a margin ranging from 0.35% to 1.20% , depending on our consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements which fix Term SOFR for $525.0 million of borrowings and an interest rate cap agreement on $75.0 million of borrowings under the term loan. As of June 30, 2024, total commitments for the term loan were $600.0 million. This term loan is available for general corporate purposes including, but not limited to, our acquisition and operation of permitted investments. (4) Interest rates range from 2.85% to 6.09% , including the effect of an interest rate swap agreement that fixes Term SOFR for $367.8 million of borrowings. The assets and credit of each of our consolidated properties pledged as collateral for our mortgage notes are not available to satisfy our other debt and obligations, unless we first satisfy the mortgage notes payable on the respective underlying properties. (5) Comprised of a $209.3 million mortgage note, a $408.0 million mortgage note, a $129.1 million mortgage note and a $590.0 million mortgage note. As of June 30, 2024, borrowings under the $129.1 million mortgage note amounted to $116.6 million. The effective interest rate of the $209.3 million mortgage note is calculated based on Adjusted Term SOFR plus a margin of 1.50% , including the effects of interest rate cap agreements. The effective interest rate of the $408.0 million mortgage note is calculated based on Adjusted Term SOFR plus a margin of 1.65% , including the effects of an interest rate cap agreement. The effective interest rate of the $129.1 million mortgage note is calculated based on Term SOFR plus a margin of 3.30% , including the effects of interest rate cap agreements. The effective interest rate of the $590.0 million mortgage note is calculated based on Term SOFR plus a margin of 2.33% , including the effects of an interest rate cap agreement. (6) The weighted-average remaining term of our consolidated debt was approximately 2.1 years as of June 30, 2024, excluding any extension options on the line of credit and certain of our mortgage notes. For the three months ended June 30, 2024 and 2023, the amount of interest incurred related to our consolidated indebtedness, excluding debt issuance cost amortization and amounts capitalized, was $49.1 million and $33.6 million, respectively, including $3.0 million and $0.4 million, respectively, related to the amortization of our interest rate cap premiums. For the six months ended June 30, 2024 and 2023, the amount of interest incurred related to our consolidated indebtedness, excluding debt issuance cost amortization and amounts capitalized, was $94.3 million and $64.5 million, respectively, including $5.8 million and $0.6 million, respectively, related to the amortization of our interest rate cap premiums. For the three and six months ended June 30, 2024, the amount of interest capitalized was $3.9 million and $9.0 million, respectively, and for the three and six months ended June 30, 2023, the amount of interest capitalized was $4.8 million and $9.3 million, respectively. See “Note 6” for the amount of interest incurred related to the DST Program (as defined below). As of June 30, 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 $ — $ — $ 38,000 $ 38,000 2025 88,000 — 985,080 1,073,080 2026 — 600,000 706,646 1,306,646 2027 — 550,000 333,750 883,750 2028 — — — — Thereafter — — 461,140 461,140 Total principal payments $ 88,000 $ 1,150,000 $ 2,524,616 $ 3,762,616 (1) The line of credit matures in March 2025 and the term may be extended pursuant to two one-year extension options, subject to certain conditions. (2) With respect to our mortgage notes, the term of our $ 209.3 million mortgage note that matures in July 2025 may be extended pursuant to a one-year extension option, subject to certain conditions. Our $ 408.0 million mortgage note that matures in January 2025 , our $ 367.8 million mortgage note that matures in July 2025 , and our $ 129.1 million mortgage note that matures in October 2026, all may be extended pursuant to two one-year extension options, subject to certain conditions. Our $590.0 million mortgage note that matures in July 2026 may be extended pursuant to three one-year extension options, subject to certain conditions. Additionally, one of our fixed-rate mortgage notes with commitments of $222.3 million that matures in May 2027 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 all covenants as of June 30, 2024. Master Repurchase Agreement On June 26, 2023, we entered into a master repurchase agreement (the “Morgan Stanley MRA”) with Morgan Stanley Bank, N.A. (“Morgan Stanley”). Under the Morgan Stanley MRA, we may negotiate individual transactions to sell, and later repurchase, certain securities or other assets to Morgan Stanley. Any transactions under the Morgan Stanley MRA will be recognized as secured borrowings while they are outstanding and are carried at the contractual amount, as specified in the Morgan Stanley MRA. Such borrowings are recorded as secured financings on investments in real estate debt securities on the condensed consolidated balance sheets. The terms of the Morgan Stanley MRA provide the lenders the ability to determine the size and terms of the financing provided based upon the particular collateral we have pledged, and may require us to provide additional collateral in the form of cash, securities, and other assets if the market value of such financed investments declines. The Morgan Stanley MRA may be terminated at any time by either party to the agreement, without penalty. The interest rate on the Morgan Stanley MRA borrowings is determined based on prevailing rates corresponding to the terms of the borrowings, and interest is paid at the termination of each borrowing. We have $106.8 million of borrowings outstanding pursuant to the Morgan Stanley MRA, collateralized by our available-for-sale debt securities, which are fair valued at $148.5 million, as of June 30, 2024. Advances under the Morgan Stanley MRA for the six months ended June 30, 2024 accrued interest at a per annum rate equal to the sum of Term SOFR plus a pricing margin ranging from 0.75% to 1.20%. For the three and six months ended June 30, 2024, the amount of interest incurred related to our secured financings was $1.1 million and $1.7 million, respectively, which is recorded as a component of interest expense on the condensed consolidated statements of operations. 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. 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. For interest rate cap derivative instruments that are not designated as cash flow 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). During the next 12 months, we estimate that approximately $31.5 million will be reclassified as a decrease to interest expense related to active effective hedges of existing floating-rate debt. The following table summarizes the location and fair value of the derivative instruments on our condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023. Number of Notional Balance Sheet Fair ($ in thousands) Contracts Amount Location Value As of June 30, 2024 Interest rate swaps designated as cash flow hedges 10 $ 1,092,830 Derivative instruments $ 51,538 Interest rate caps not designated as cash flow hedges 5 797,110 Derivative instruments 8,313 Interest rate caps designated as cash flow hedges 9 1,075,000 Derivative instruments 32,828 Total derivative instruments (1) 23 $ 2,964,940 $ 92,679 As of December 31, 2023 Interest rate swaps designated as cash flow hedges 11 $ 1,142,830 Derivative instruments $ 41,091 Interest rate caps not designated as cash flow hedges 4 707,110 Derivative instruments 14,887 Interest rate caps designated as cash flow hedges 8 475,000 Derivative instruments 27,553 Total derivative instruments 23 $ 2,324,940 $ 83,531 (1) Includes one interest rate cap agreement with a total notional amount of $590.0 million, with $500.0 million of the total notional amount designated as a cash flow hedge and $90.0 million of the total notional amount not designated as a cash flow hedge as of June 30, 2024. As such, the total number of contracts does not equal the sum of the number of contracts by category as of June 30, 2024. The following table presents the effect of our derivative instruments on our condensed consolidated financial statements. For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Derivative Instruments Designated as Cash Flow Hedges Gain recognized in AOCI $ 9,186 $ 31,575 $ 37,717 $ 20,322 Amount reclassified from AOCI as a decrease into interest expense (10,051) (11,004) (20,202) (20,059) Total interest expense presented in the condensed consolidated statements of operations in which the effects of the cash flow hedges are recorded (63,448) (49,971) (119,149) (98,435) Derivative Instruments Not Designated as Cash Flow Hedges Unrealized (loss) gain on derivative instruments recognized in other income (expenses) (1) $ (4,467) $ 2,610 $ (7,296) $ (2,870) Realized gain on derivative instruments recognized in other income (expenses) (2) 5,144 4,626 10,292 8,522 (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 | 6 Months Ended |
Jun. 30, 2024 | |
DST PROGRAM [Abstract] | |
DST PROGRAM | efcond 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 (each, 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 June 30, 2024 and December 31, 2023: Outstanding Unrealized Weighted-Average Weighted-Average ($ in thousands) Principal Loss, Net (1) Book Value Interest Rate Remaining Life (Years) As of June 30, 2024 DST Program Loans, carried at cost $ 127,000 $ N/A $ 127,000 5.50 % 7.55 DST Program Loans, carried at fair value 10,711 (245) 10,466 6.54 9.75 Total $ 137,711 $ (245) $ 137,466 5.58 % 7.73 As of December 31, 2023 DST Program Loans, carried at cost $ 200,276 $ N/A $ 200,276 4.98 % 7.42 DST Program Loans, carried at fair value 2,439 — 2,439 6.27 10.00 Total $ 202,715 $ N/A $ 202,715 5.00 % 7.45 (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 June 30, 2024 and December 31, 2023: DST Unamortized Total Unrealized ($ in thousands) Interests Sold (1) Program Costs Appreciation (2) Gain, Net (3) Book Value As of June 30, 2024 Financing obligations, carried at cost $ 1,057,349 $ (1,169) $ — $ N/A $ 1,056,180 Financing obligations, carried at fair value 199,783 N/A N/A (2,279) 197,504 Total $ 1,257,132 $ (1,169) $ — $ (2,279) $ 1,253,684 As of December 31, 2023 Financing obligations, carried at cost $ 1,559,200 $ (1,975) $ 14,264 $ N/A $ 1,571,489 Financing obligations, carried at fair value 87,324 N/A N/A (179) 87,145 Total $ 1,646,524 $ (1,975) $ 14,264 $ (179) $ 1,658,634 (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 and six months ended June 30, 2024 and 2023: For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 DST Interests sold $ 46,481 $ 106,718 $ 114,917 $ 217,632 DST Interests financed by DST Program Loans 3,076 18,916 8,272 32,611 Unrealized loss on DST Program Loans (245) — (245) — Unrealized gain on financing obligations 95 — 2,100 — Income earned from DST Program Loans (1) 1,920 2,089 4,316 3,920 Increase (decrease) in financing obligation liability appreciation (2) — 2,680 (6,664) 7,414 Rent obligation incurred under master lease agreements (2) 14,049 16,116 32,310 31,111 (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 partnership units in the Operating Partnership (“OP Units”) in exchange for DST Interests, we extinguish the related financing obligation liability and DST Program Loans and record the issuance of the OP Units as an issuance of equity. During the six months ended June 30, 2024, 33.8 million OP Units were issued in exchange for DST Interests for a net investment of $436.2 million in accordance with our Umbrella Partnership Real Estate Investment Trust (“UPREIT”) structure. There were no OP Units issued during the six months ended June 30, 2023. Refer to “Note 11” for detail relating to the fees paid to the Advisor, Ares Wealth Management Solutions, LLC (the “Dealer Manager”) and their affiliates for raising capital through the DST Program. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2024 | |
FAIR VALUE [Abstract] | |
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 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 as of June 30, 2024 and December 31, 2023: Total (in thousands) Level 1 Level 2 Level 3 Fair Value As of June 30, 2024 Assets Derivative instruments $ — $ 92,679 $ — $ 92,679 Available-for-sale debt securities — 148,490 — 148,490 Debt-related investments — — 208,107 208,107 DST Program Loans — — 10,466 10,466 Total assets measured at fair value $ — $ 241,169 $ 218,573 $ 459,742 Liabilities Financing obligations $ — $ — $ 197,504 $ 197,504 Total liabilities measured at fair value $ — $ — $ 197,504 $ 197,504 As of December 31, 2023 Assets Derivative instruments $ — $ 83,531 $ — $ 83,531 Available-for-sale debt securities — 55,632 — 55,632 Debt-related investments — — 129,123 129,123 DST Program Loans — — 2,439 2,439 Total assets measured at fair value $ — $ 139,163 $ 131,562 $ 270,725 Liabilities Financing obligations $ — $ — $ 87,145 $ 87,145 Total liabilities measured at fair value $ — $ — $ 87,145 $ 87,145 The following methods and assumptions were used to estimate the fair value of each class of financial assets and liabilities: Derivative Instruments. Available-for-Sale Debt Securities. value measurements, which we have concluded are not material to the valuation. Due to the available-for-sale debt securities being unique and not actively traded, the fair value is classified as Level 2. Debt-Related Investments. Our debt-related investments are unlikely to have readily available market quotations. In such cases, we will generally determine the initial value based on the acquisition price of such investments, if we acquire the investment, or the par value of such investment, if we originate the investment. 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. These inputs are generally considered Level 3. As of June 30, 2024, we had four floating-rate senior loan investments without readily available market quotations. DST Program Loans. Financing Obligations. The following table presents our financial assets measured at fair value on a recurring basis using Level 3 inputs: (in thousands) DST Program Loans Debt-related investments Total Balance as of December 31, 2023 $ 2,439 $ 129,123 $ 131,562 Purchases and contributions 8,272 76,547 84,819 Unrealized loss on financial assets (245) — (245) Paid-in-kind interest — 2,437 2,437 Balance as of June 30, 2024 $ 10,466 $ 208,107 $ 218,573 The following table presents our financial liabilities measured at fair value on a recurring basis using Level 3 inputs: (in thousands) Financing Obligations Balance as of December 31, 2023 $ 87,145 DST Interests sold, net of upfront fees 112,459 Unrealized gain on financing obligations (2,100) Balance as of June 30, 2024 $ 197,504 The following table presents the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy as of June 30, 2024: (in thousands) Fair Value Valuation Technique Unobservable Inputs Impact to Valuation from an Increase to Input Assets: Debt-related investments $ 208,107 Yield Method Market Yield Decrease DST Program Loans 10,466 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 197,504 Discounted Cash Flow Discount Rate Decrease 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: (in thousands) Fair Value Valuation Technique Unobservable Inputs Impact to Valuation from an Increase to Input Assets: Debt-related investments $ 129,123 Yield Method Market Yield Decrease DST Program Loans 2,439 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 87,145 Discounted Cash Flow Discount Rate Decrease Financial Assets and Liabilities Not Measured At Fair Value As of June 30, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, other assets, and accounts payable and accrued liabilities approximate their carrying values due to 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 June 30, 2024 As of December 31, 2023 Level in Carrying Fair Carrying Fair (in thousands) Fair Value Hierarchy (1) Value (2) Value Value (2) Value Assets: DST Program Loans (3) 3 $ 127,000 $ 125,435 $ 200,276 $ 196,715 Liabilities: Line of credit 3 $ 88,000 $ 88,000 $ 570,000 $ 570,000 Term loans 3 1,150,000 1,150,000 1,150,000 1,150,000 Mortgage notes 3 2,524,616 2,426,328 1,722,325 1,647,660 Secured financings on investments in real estate debt securities 3 106,799 106,799 42,298 42,298 (1) The estimate of fair value of DST Program Loans, line of credit, term loans, mortgage notes and secured financings on investments in real estate debt securities 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. (2) The carrying value reflects the principal amount outstanding. (3) Comprised of 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
EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
EQUITY [Abstract] | |
EQUITY | 8. EQUITY Securities Offerings We may conduct continuous securities 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 August 4, 2021, the SEC declared our registration statement on Form S-11 effective with respect to our third public offering of up to $5.0 billion of shares of our common stock in any combination of Class T shares, Class D shares, and Class I shares, and the third public offering commenced the same day. We closed the offering of primary shares to new investors pursuant to our third public offering on July 2, 2024, but we are continuing to offer shares in our third public offering to existing investors pursuant to our distribution reinvestment plan (“DRIP”). See “Note 15” for additional information about our capital raising activities subsequent to June 30, 2024. Pursuant to our securities offerings, we have offered shares of our common stock at the “transaction price,” plus applicable selling commissions and dealer manager fees. The “transaction price” generally is equal to the net asset value (“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 six months ended June 30, 2024, we raised gross proceeds of approximately $82.3 million from the sale of approximately 6.3 million shares of our common stock in our third public offering, including proceeds from our distribution reinvestment plan of approximately $44.7 million. Common Stock The following table summarizes the changes in the shares outstanding for each class of common stock for the periods presented below: Class T Class D Class I Total (in thousands) Shares Shares Shares Shares FOR THE THREE MONTHS ENDED JUNE 30, 2023 Balance as of March 31, 2023 213,861 20,818 77,843 312,522 Issuance of common stock: Primary shares 2,107 519 1,055 3,681 DRIP 880 103 376 1,359 Stock grants, net of cancellations — — — — Redemptions (6,543) (472) (2,735) (9,750) Conversions (8,512) — 8,512 — Forfeitures — — (7) (7) Balance as of June 30, 2023 201,793 20,968 85,044 307,805 FOR THE THREE MONTHS ENDED JUNE 30, 2024 Balance as of March 31, 2024 125,151 20,023 138,897 284,071 Issuance of common stock: Primary shares 691 232 441 1,364 DRIP 719 124 918 1,761 Stock grants, net of cancellations — — 42 42 Redemptions (6,767) (1,008) (6,184) (13,959) Conversions (6,728) — 6,728 — Forfeitures — — (4) (4) Balance as of June 30, 2024 113,066 19,371 140,838 273,275 FOR THE SIX MONTHS ENDED JUNE 30, 2023 Balance as of December 31, 2022 227,265 20,577 66,702 314,544 Issuance of common stock: Primary shares 5,401 1,283 2,311 8,995 DRIP 1,808 205 706 2,719 Stock grants, net of cancellations — — 165 165 Redemptions (12,753) (1,097) (4,759) (18,609) Conversions (19,928) — 19,928 — Forfeitures — — (9) (9) Balance as of June 30, 2023 201,793 20,968 85,044 307,805 FOR THE SIX MONTHS ENDED JUNE 30, 2024 Balance as of December 31, 2023 162,838 20,410 105,358 288,606 Issuance of common stock: Primary shares 1,444 428 979 2,851 DRIP 1,522 248 1,684 3,454 Stock grants, net of cancellations — — 130 130 Redemptions (10,761) (1,476) (9,516) (21,753) Conversions (41,977) (239) 42,216 — Forfeitures — — (13) (13) Balance as of June 30, 2024 113,066 19,371 140,838 273,275 Distributions The following table summarizes our distribution activity (including distributions to noncontrolling interests and distributions reinvested in shares of our common stock) for each of the quarters ended below: Amount Common Stock Declared per Distributions Other Cash Reinvested Distribution Gross (in thousands, except per share data) Common Share (1) Paid in Cash Distributions (2) in Shares Fees (3) Distributions (4) 2024 June 30 $ 0.15000 $ 16,430 $ 6,331 $ 22,114 $ 3,082 $ 47,957 March 31 0.15000 16,820 2,235 22,484 3,596 45,135 Total $ 0.30000 $ 33,250 $ 8,566 $ 44,598 $ 6,678 $ 93,092 2023 December 31 $ 0.15000 $ 16,483 $ 1,270 $ 22,196 $ 4,987 $ 44,936 September 30 0.15000 16,825 1,296 22,550 5,721 46,392 June 30 0.13625 15,490 1,177 20,357 6,344 43,368 March 31 0.13625 15,284 1,107 20,653 6,806 43,850 Total $ 0.57250 $ 64,082 $ 4,850 $ 85,756 $ 23,858 $ 178,546 (1) Amounts reflect the quarterly distribution rate authorized by our board of directors per Class T share, per Class D share, and per Class I 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 and Class D shares of common stock are reduced by the respective distribution fees that are payable with respect to such Class T shares and Class D shares. (2) Consists of distribution fees paid to 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 and Class D shares issued in the primary portion of our securities offerings only. All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. Refer to “Note 11” for further detail regarding distribution fees. (4) Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares and Class D shares issued in the primary portion of our securities offerings. Redemptions Below is a summary of redemptions pursuant to our share redemption program for the six months ended June 30, 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 make exceptions to, modify or suspend our current share redemption programs if it deems such action to be in the best interest of our stockholders: For the Six Months Ended June 30, (in thousands, except per share data) 2024 2023 Number of shares redeemed 21,753 18,609 Aggregate dollar amount of shares redeemed $ 279,172 $ 280,939 Average redemption price per share $ 12.83 $ 15.10 |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS | 6 Months Ended |
Jun. 30, 2024 | |
REDEEMABLE NONCONTROLLING INTERESTS [Abstract] | |
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 BCI IV 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”). 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. The following table summarizes the redeemable noncontrolling interests activity for the six months ended June 30, 2024 and 2023: For the Six Months Ended June 30, 2024 For the Six Months Ended June 30, 2023 ($ and units in thousands) $ Units $ Units Balance at beginning of the year $ 114,310 8,346 $ 69,553 4,532 Settlement of prior year performance participation allocation (1) — — 62,667 4,106 Distributions to redeemable noncontrolling interests (2,504) — (2,284) — Redemptions of redeemable noncontrolling interests (1,000) (79) — — Net loss attributable to redeemable noncontrolling interests (1,586) — (3,018) — Change from cash flow hedging activities and available-for-sale debt securities attributable to redeemable noncontrolling interests 487 — 59 — Redemption value allocation adjustment to redeemable noncontrolling interests (2) (1,715) — (911) — Ending balance $ 107,992 8,267 $ 126,066 8,638 (1) The performance hurdle was not met for the year ended December 31, 2023 and no performance participation allocation expense was recognized. The 2022 performance participation allocation in the amount of $140.5 million became payable on December 31, 2022, and the Advisor elected to settle a portion of the amount owed in cash in the amount of $77.8 million, and the remainder in 4.1 million Class I OP Units in January 2023 to the holder of a separate series of partnership interests in the Operating Partnership with special distribution rights (the “Special Units”), AIREIT Incentive Fee LP (the “Special Unit Holder”). (2) Represents the adjustment recorded to mark to the redemption value, which is equivalent to fair value, as of June 30, 2024 and 2023. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 6 Months Ended |
Jun. 30, 2024 | |
NONCONTROLLING INTERESTS [Abstract] | |
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 Six Months Ended June 30, (in thousands) 2024 2023 Balance at beginning of the period — — Issuance of units 33,792 — Balance at end of the period 33,792 — Subject to certain restrictions and limitations, the holders of OP Units may redeem all or a portion of their OP Units for: 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. The estimated maximum redemption value of the aggregate outstanding OP Units issued to third party investors as of June 30, 2024 was $425.9 2023, no OP Units were issued to third-party investors. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2024 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
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 June 30, For the Six Months Ended June 30, Receivable (Payable) as of (in thousands) 2024 2023 2024 2023 June 30, 2024 December 31, 2023 Selling commissions and dealer manager fees (1) $ 326 $ 1,175 $ 678 $ 3,183 $ — $ — Ongoing distribution fees (1)(2) 3,896 6,344 7,642 13,150 (1,252) (1,549) Advisory fee—fixed component 16,495 18,965 33,502 38,219 (5,458) (5,813) Other expense reimbursements (3)(4) 3,369 2,601 6,657 5,940 (3,368) (2,799) Property accounting fee (5) 899 856 1,742 1,680 (295) 129 DST Program selling commissions, dealer manager fees and distribution fees (1) 1,131 1,564 2,549 3,002 (615) (852) Other DST Program related costs (4) 747 1,411 1,785 2,916 (145) (215) Development fees (6) 211 176 503 867 (163) (588) Total $ 27,074 $ 33,092 $ 55,058 $ 68,957 $ (11,296) $ (11,687) (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 $86.9 million and $64.5 million as of June 30, 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 6, allocated rent paid to both third parties and affiliates of the 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 limited 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. (6) Development fees are included in the total development project costs of the respective properties and are capitalized in construction in progress, which is included in net investment in real estate properties on our condensed consolidated balance sheets. Amounts also include our proportionate share of development acquisition fees relating to our joint venture partnership, which are included in investment in unconsolidated joint venture partnership on our condensed consolidated balance sheets. Certain of the expense reimbursements described in the table above include a portion of the compensation expenses of officers, including a portion of compensation (whether paid in cash, stock, or other forms), benefits and other overhead costs of certain of our named executive officers, as well as employees of the Advisor or its affiliates related to activities for which the Advisor did not otherwise receive a separate fee. We incurred approximately $3.1 million and $2.5 million for the three months ended June 30, 2024 and 2023, respectively, and $6.3 million and $5.6 million for the six months ended June 30, 2024 and 2023, respectively, for such compensation expenses reimbursable to the Advisor. 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 June 30, 2024 and 2023; therefore no performance participation allocation expense was recognized in our condensed consolidated statements of operations for the six months ended June 30, 2024 and 2023. Joint Venture Partnerships For the three and six months ended June 30, 2024, our joint venture partnership incurred approximately $0.4 million and $0.7 million, respectively, in acquisition and asset management fees, and fees related to development, which were paid to affiliates of the Advisor pursuant to their respective service agreements. For the three and six months ended June 30, 2023, our joint venture partnership incurred approximately $0.7 million and $1.3 million, respectively, in acquisition and asset management fees, and fees related to development, which were paid to affiliates of the Advisor pursuant to their respective service agreements. |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2024 | |
NET INCOME (LOSS) PER COMMON SHARE [Abstract] | |
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 June 30, For the Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Net loss attributable to common stockholders—basic $ (43,370) $ (48,257) $ (53,048) $ (113,069) Net loss attributable to redeemable noncontrolling interests (1,304) (1,346) (1,586) (3,018) Net (loss) income attributable to noncontrolling interests (5,270) 10 (5,478) 19 Net loss attributable to common stockholders—diluted $ (49,944) $ (49,593) $ (60,112) $ (116,068) Weighted-average shares outstanding—basic 277,521 309,616 281,755 311,543 Incremental weighted-average shares outstanding—diluted 42,139 8,638 28,454 8,366 Weighted-average shares outstanding—diluted 319,660 318,254 310,209 319,909 Net loss per share attributable to common stockholders: Basic $ (0.16) $ (0.16) $ (0.19) $ (0.36) Diluted $ (0.16) $ (0.16) $ (0.19) $ (0.36) |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 6 Months Ended |
Jun. 30, 2024 | |
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | |
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 Six Months Ended June 30, (in thousands) 2024 2023 Supplemental disclosure of non-cash investing and financing activities: Distributions reinvested in common stock 44,675 41,093 Increase in DST Program Loans receivable through DST Program capital raising 8,272 32,611 Issuances of OP Units for DST Interests 436,174 — Redeemable noncontrolling interests issued as settlement of performance participation allocation — 62,667 Increase (decrease) in accrued future ongoing distribution fees 22,349 (11,825) (Decrease) increase in accrued capital expenditures (24,131) (4,853) Non-cash selling commissions and dealer manager fees 678 3,183 Restricted Cash Restricted cash consists of lender, insurance and property-related escrow accounts, as well as utility deposits. 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 Six Months Ended June 30, (in thousands) 2024 2023 Beginning of period: Cash and cash equivalents $ 14,322 $ 79,524 Restricted cash 620 499 Cash, cash equivalents and restricted cash $ 14,942 $ 80,023 End of period: Cash and cash equivalents $ 31,431 $ 52,525 Restricted cash 3,091 488 Cash, cash equivalents and restricted cash $ 34,522 $ 53,013 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
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 June 30, 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 and 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 June 30, 2024. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2024 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS Issuance of OP Units On July 1, 2024, 8.3 million OP Units were issued in exchange for DST Interests for a net investment of $104.7 million in accordance with our UPREIT structure. The net carrying value of the related financing obligation liability and DST Program Loans Close of Primary Public Offering and Launch of Private Placement On July 2, 2024, we closed the offering of primary shares to new investors pursuant to our third public offering. We are continuing to offer shares in our third public offering to existing investors pursuant to our DRIP. On August 2, 2024, we initiated a private offering exempt from registration under the Securities Act of 1933, as amended (the “Private Offering”). Dealer Manager Agreement In connection with the Private Offering, on August 2, 2024, we and our Dealer Manager entered into a dealer manager agreement (the “Dealer Manager Agreement”) under which Class S-PR Common Shares, Class D-PR Common Shares and Class I-PR Common Shares in the Company (each as defined below) will be sold through the Dealer Manager. Under the Dealer Manager Agreement, the Company will pay certain fees to the Dealer Manager, including up-front selling commissions, dealer manager fees and distribution fees, the amount of which will vary by share class. The Dealer Manager and Company have also agreed to provide indemnification as set forth in the Dealer Manager Agreement. Any party may terminate the Dealer Manager Agreement upon 60 days’ written notice. Second Amended and Restated Advisory Agreement (2024) The Company, the Operating Partnership and the Advisor previously entered into that certain Amended and Restated Advisory Agreement (2024), effective as of April 30, 2024 and effective through April 30, 2025 (the “2024 Advisory Agreement”). On August 2, 2024, the Company, the Operating Partnership and the Advisor amended and restated the 2024 Advisory Agreement by entering into the Second Amended and Restated Advisory Agreement (2024) (the “Amended Advisory Agreement”). The Amended Advisory Agreement amends the 2024 Advisory Agreement to make immaterial changes regarding the Private Offering and related matters. Twelfth Amended and Restated Limited Partnership Agreement On August 2, 2024, we and AIREIT Incentive Fee LP, an affiliate of our Advisor, replaced the then-current limited partnership agreement of the Operating Partnership by entering into a Twelfth Amended and Restated Limited Partnership Agreement (the “Amended OP Agreement”). The Amended OP Agreement reflects revisions to the names of the existing classes and designations of additional classes of limited partnership units that correspond to the revisions to our share classes described below and other immaterial changes regarding the Private Offering and related matters. Amendments to Charter On July 31, 2024, the Company amended its charter to reflect that, effective on July 31, 2024 (the “Articles of Amendment Effective Time”), (i) each share of Class T common stock, $0.01 par value per share (the “Class T Common Shares”), of the Company was renamed as a “Class T-R Common Share,” (ii) each share of Class D common stock, $0.01 par value per share (the “Class D Common Shares”), of the Company was renamed as a “Class D-R Common Share,” and (iii) each share of Class I common stock, $0.01 par value per share (the “Class I Common Shares”), of the Company was renamed as a “Class I-R Common Share.” The renaming of these classes of shares applies to all such shares issued and outstanding immediately prior to the amendment and all such shares which were authorized and unissued as of the time of the amendment. Also effective on July 31, 2024, immediately following the amendment of its charter, the Company filed Articles Supplementary to its charter that further redesignated and reclassified the 1,025,000,000 authorized but unissued common shares as (i) 425,000,000 shares of Class S-PR common stock, $0.01 par value per share (the “Class S-PR Common Shares”), (ii) 175,000,000 shares of Class D-PR common stock, $0.01 par value per share (the “Class D-PR Common Shares”), and (iii) 425,000,000 shares of Class I-PR common stock, $0.01 par value per share (the “Class I-PR Common Shares”). Share Redemption Program Amendment Our board of directors amended our share redemption program by adopting the Third Amended and Restated Share Redemption Program (the “Amended SRP”) primarily to reflect our revised share class names and designations, including the addition of Class S-PR, D-PR and I-PR Common Shares. The Amended SRP also clarifies that (i) shares redeemed on a repurchase date remain outstanding on the repurchase date and are no longer outstanding on the day following the redemption date and (ii) for purposes of measuring redemption capacity under the Amended SRP, (a) proceeds from new subscriptions are included in capital inflows on the first day of the next month because that is the first day on which such stockholders have rights in the Company and (b) redemption requests received in a month are included in capital outflows on the last day of such month because that is the last day stockholders have rights in the Company. Furthermore, the Amended SRP reflects that we may, in addition to other circumstances, waive the Early Repurchase Deduction (as defined in the Amended SRP) with respect to redemption requests submitted by discretionary model portfolio management programs (and similar arrangements) or with respect to redemption requests submitted by feeder vehicles (or similar vehicles) primarily created to hold shares of our common stock, which are offered to non-U.S. persons, where such vehicles seek to avoid imposing such a deduction because of administrative or systems limitations. Other immaterial changes were also made in the Amended SRP. Distribution Reinvestment Plan Amendment Our board of directors amended our distribution reinvestment plan by adopting the Fifth Amended and Restated Distribution Reinvestment Plan (the “Amended DRP”) to reflect that shares distributed by the Company in connection with the Amended DRP will be offered and sold by us in an offering registered under the Securities Act of 1933, as amended, or pursuant to an applicable exemption from such registration requirements. The Amended DRP also removes provisions pertaining to the Company’s distribution of shares that were purchased in a secondary market or a national stock exchange. Other immaterial changes were also made to the Amended DRP. Net Asset Value Calculation and Valuation Procedures Amendment We amended our Net Asset Value Calculation and Valuation Procedures (the “Valuation Procedures”) in order to make immaterial updates primarily related to our revised share class names and designations. Dispositions Subsequent to June 30, 2024, we sold two industrial properties for a gross sales price of $32.2 million. Our accounting basis (net of accumulated depreciation and amortization) for these properties as of the disposition date was approximately $17.7 million. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (43,370) | $ (48,257) | $ (53,048) | $ (113,069) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 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 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Reclassifications | Reclassifications Certain items in our condensed consolidated statements of cash flows for the six months ended June 30, 2023 have been reclassified to conform to the 2024 presentation. |
Noncontrolling Interests | Noncontrolling Interests Tr |
INVESTMENTS IN REAL ESTATE PR_2
INVESTMENTS IN REAL ESTATE PROPERTIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
INVESTMENTS IN REAL ESTATE PROPERTIES [Abstract] | |
Schedule of Consolidated Investments in Real Estate Properties | As of June 30, 2024 and December 31, 2023, our consolidated investment in real estate properties consisted of 250 and 256 industrial buildings, respectively. Additionally, investment in real estate properties included one building under construction and one building in the pre-construction phase as of both June 30, 2024 and December 31, 2023. As of (in thousands) June 30, 2024 December 31, 2023 Land $ 1,298,884 $ 1,300,059 Building and improvements (1) 5,578,091 5,486,636 Intangible lease assets 505,774 498,053 Construction in progress 137,410 219,659 Investment in real estate properties 7,520,159 7,504,407 Less accumulated depreciation and amortization (877,011) (750,429) Net investment in real estate properties $ 6,643,148 $ 6,753,978 (1) Includes site improvements. |
Schedule of Asset Acquisitions | During the six months ended June 30, 2024, we acquired 100% of the following properties, which were determined to be asset acquisitions: Number of Total Purchase ($ in thousands) Acquisition Date Buildings Price (1) 2024 Acquisitions: Plainfield Distribution Center I&II 4/8/2024 2 $ 78,087 Baymeadow Commerce Center 5/9/2024 1 18,051 Nashville Logistics Center 6/27/2024 1 52,811 Total Acquisitions 4 $ 148,949 (1) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2024 acquisitions. |
Allocation of Purchase Price of Acquisitions | During the six months ended June 30, 2024, we allocated the purchase price of our acquisitions to land, building and improvements, construction in progress, and intangible lease assets and liabilities as follows: For the Six Months Ended (in thousands) June 30, 2024 Land $ 24,212 Building and improvements (1) 115,403 Intangible lease assets 13,007 Below-market lease liabilities (3,673) Total purchase price (2) $ 148,949 (1) Includes site improvements. (2) Total purchase price is equal to the total consideration paid plus any debt assumed at fair value. There was no debt assumed in connection with the 2024 acquisitions. |
Schedule of Intangible Lease Assets and Liabilities | Intangible lease assets and liabilities as of June 30, 2024 and December 31, 2023 included the following: As of June 30, 2024 As of December 31, 2023 Accumulated Accumulated (in thousands) Gross Amortization Net Gross Amortization Net Intangible lease assets (1) $ 493,429 $ (274,578) $ 218,851 $ 485,184 $ (243,878) $ 241,306 Above-market lease assets (1) 12,345 (6,547) 5,798 12,869 (5,916) 6,953 Below-market lease liabilities (132,467) 63,134 (69,333) (129,823) 54,682 (75,141) (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 June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Increase (Decrease) to Rental Revenue: Straight-line rent adjustments $ 4,009 $ 4,117 $ 8,224 $ 7,215 Above-market lease amortization (417) (530) (856) (1,083) Below-market lease amortization 4,414 5,342 8,930 11,617 Real Estate-Related Depreciation and Amortization: Depreciation expense $ 54,758 $ 51,472 $ 108,516 $ 101,907 Intangible lease asset amortization 17,458 20,537 35,930 42,433 |
INVESTMENTS IN REAL ESTATE DE_2
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES [Abstract] | |
Summary of Debt Related Investments | The following table summarizes our debt-related investments as of June 30, 2024: ($ in thousands) As of June 30, 2024 Loan Type Property Type Location Origination Date Total Commitment Outstanding Principal Fair Value Interest Rate Maturity Date (1) Senior Industrial TX July 2023 $ 60,860 $ 49,289 $ 49,289 9.18 % Aug 2025 Senior Industrial NY August 2023 113,910 101,897 101,897 8.83 Sept 2026 Senior Industrial TX January 2024 36,404 19,921 19,921 10.08 Feb 2027 Senior Industrial NC April 2024 38,350 37,000 37,000 8.58 Apr 2027 Total / weighted-average $ 249,524 $ 208,107 $ 208,107 9.00 % (1) The weighted-average remaining term of our debt-related investments was approximately 2.1 years as of June 30, 2024. The following table summarizes our debt-related investments as of December 31, 2023: ($ in thousands) As of December 31, 2023 Loan Type Property Type Location Origination Date Total Commitment Outstanding Principal Fair Value Interest Rate Maturity Date (1) Senior Industrial TX July 2023 $ 60,860 $ 29,700 $ 29,700 9.21 % Aug 2025 Senior Industrial NY August 2023 113,910 99,423 99,423 8.86 Sept 2026 Total / weighted-average $ 174,770 $ 129,123 $ 129,123 8.94 % (1) The weighted-average remaining term of our debt-related investments was approximately 2.5 years as of December 31, 2023. |
Summary of Available for Sale Debt Securities | The following table summarizes our investments in available-for-sale debt securities as of June 30, 2024 and December 31, 2023: ($ in thousands) Face Amount (1) Amortized Cost Unamortized Discount Unrealized Gain, Net (2) Fair Value As of June 30, 2024 $ 150,152 $ 148,086 $ 2,066 $ 404 $ 148,490 As of December 31, 2023 $ 57,326 $ 55,186 $ 2,140 $ 446 $ 55,632 (1) Face amount is presented net of repayments. (2) Represents cumulative unrealized gain (loss) beginning from acquisition date. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
DEBT [Abstract] | |
Schedule of Debt | A summary of our debt is as follows: Weighted-Average Effective Interest Rate as of Balance as of June 30, December 31, June 30, December 31, ($ in thousands) 2024 2023 Maturity Date 2024 2023 Line of credit (1) 3.67 % 6.20 % March 2025 $ 88,000 $ 570,000 Term loan (2) 3.54 3.35 March 2027 550,000 550,000 Term loan (3) 3.47 3.42 May 2026 600,000 600,000 Fixed-rate mortgage notes (4) 4.01 3.58 August 2024 - 1,200,720 996,720 Floating-rate mortgage notes (5) 5.54 4.48 January 2025 - 1,323,896 725,605 Total principal amount / weighted-average (6) 4.38 % 4.17 % $ 3,762,616 $ 3,442,325 Less unamortized debt issuance costs (34,230) (21,359) Add unamortized mark-to-market adjustment on assumed debt 110 215 Total debt, net $ 3,728,496 $ 3,421,181 Gross book value of properties encumbered by debt $ 3,835,742 $ 2,596,052 (1) The effective interest rate is calculated based on either (i) the Term Secured Overnight Financing Rate (“Term SOFR”) plus a 10 basis point adjustment (“Adjusted Term SOFR”) plus a margin ranging from 1.25% to 2.00% ; or (ii) an alternative base rate plus a margin ranging from 0.25% to 1.0% , each depending on our consolidated leverage ratio. Customary fall-back provisions apply if Term SOFR is unavailable. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate cap agreements. The line of credit is available for general corporate purposes including, but not limited to, our acquisition and operation of permitted investments. As of June 30, 2024, total commitments for the line of credit were $1.0 billion and the unused portion under the line of credit was $912.0 million, of which $484.3 million was available. (2) The effective interest rate is calculated based on either (i) Adjusted Term SOFR plus a margin ranging from 1.20% to 1.90% ; or (ii) an alternative base rate plus a margin ranging from 0.20% to 0.90% , depending on our consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements which fix Term SOFR for $200.0 million of borrowings and interest rate cap agreements on $350.0 million of borrowings under the term loan. As of June 30, 2024, total commitments for the term loan were $550.0 million. This term loan is available for general corporate purposes including, but not limited to, our acquisition and operation of permitted investments. (3) The effective interest rate is calculated based on Term SOFR plus a 11.448 basis point adjustment plus a margin ranging from 1.35% to 2.20% ; or (ii) an alternative base rate plus a margin ranging from 0.35% to 1.20% , depending on our consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements which fix Term SOFR for $525.0 million of borrowings and an interest rate cap agreement on $75.0 million of borrowings under the term loan. As of June 30, 2024, total commitments for the term loan were $600.0 million. This term loan is available for general corporate purposes including, but not limited to, our acquisition and operation of permitted investments. (4) Interest rates range from 2.85% to 6.09% , including the effect of an interest rate swap agreement that fixes Term SOFR for $367.8 million of borrowings. The assets and credit of each of our consolidated properties pledged as collateral for our mortgage notes are not available to satisfy our other debt and obligations, unless we first satisfy the mortgage notes payable on the respective underlying properties. (5) Comprised of a $209.3 million mortgage note, a $408.0 million mortgage note, a $129.1 million mortgage note and a $590.0 million mortgage note. As of June 30, 2024, borrowings under the $129.1 million mortgage note amounted to $116.6 million. The effective interest rate of the $209.3 million mortgage note is calculated based on Adjusted Term SOFR plus a margin of 1.50% , including the effects of interest rate cap agreements. The effective interest rate of the $408.0 million mortgage note is calculated based on Adjusted Term SOFR plus a margin of 1.65% , including the effects of an interest rate cap agreement. The effective interest rate of the $129.1 million mortgage note is calculated based on Term SOFR plus a margin of 3.30% , including the effects of interest rate cap agreements. The effective interest rate of the $590.0 million mortgage note is calculated based on Term SOFR plus a margin of 2.33% , including the effects of an interest rate cap agreement. (6) The weighted-average remaining term of our consolidated debt was approximately 2.1 years as of June 30, 2024, excluding any extension options on the line of credit and certain of our mortgage notes. |
Schedule of Maturities of Long-term Debt | As of June 30, 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 $ — $ — $ 38,000 $ 38,000 2025 88,000 — 985,080 1,073,080 2026 — 600,000 706,646 1,306,646 2027 — 550,000 333,750 883,750 2028 — — — — Thereafter — — 461,140 461,140 Total principal payments $ 88,000 $ 1,150,000 $ 2,524,616 $ 3,762,616 (1) The line of credit matures in March 2025 and the term may be extended pursuant to two one-year extension options, subject to certain conditions. (2) With respect to our mortgage notes, the term of our $ 209.3 million mortgage note that matures in July 2025 may be extended pursuant to a one-year extension option, subject to certain conditions. Our $ 408.0 million mortgage note that matures in January 2025 , our $ 367.8 million mortgage note that matures in July 2025 , and our $ 129.1 million mortgage note that matures in October 2026, all may be extended pursuant to two one-year extension options, subject to certain conditions. Our $590.0 million mortgage note that matures in July 2026 may be extended pursuant to three one-year extension options, subject to certain conditions. Additionally, one of our fixed-rate mortgage notes with commitments of $222.3 million that matures in May 2027 may be extended pursuant to two one-year extension options, subject to certain conditions. |
Schedule of Derivative Instruments | The following table summarizes the location and fair value of the derivative instruments on our condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023. Number of Notional Balance Sheet Fair ($ in thousands) Contracts Amount Location Value As of June 30, 2024 Interest rate swaps designated as cash flow hedges 10 $ 1,092,830 Derivative instruments $ 51,538 Interest rate caps not designated as cash flow hedges 5 797,110 Derivative instruments 8,313 Interest rate caps designated as cash flow hedges 9 1,075,000 Derivative instruments 32,828 Total derivative instruments (1) 23 $ 2,964,940 $ 92,679 As of December 31, 2023 Interest rate swaps designated as cash flow hedges 11 $ 1,142,830 Derivative instruments $ 41,091 Interest rate caps not designated as cash flow hedges 4 707,110 Derivative instruments 14,887 Interest rate caps designated as cash flow hedges 8 475,000 Derivative instruments 27,553 Total derivative instruments 23 $ 2,324,940 $ 83,531 (1) Includes one interest rate cap agreement with a total notional amount of $590.0 million, with $500.0 million of the total notional amount designated as a cash flow hedge and $90.0 million of the total notional amount not designated as a cash flow hedge as of June 30, 2024. As such, the total number of contracts does not equal the sum of the number of contracts by category as of June 30, 2024. |
Schedule of Derivative Instruments, Gain (Loss) | The following table presents the effect of our derivative instruments on our condensed consolidated financial statements. For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Derivative Instruments Designated as Cash Flow Hedges Gain recognized in AOCI $ 9,186 $ 31,575 $ 37,717 $ 20,322 Amount reclassified from AOCI as a decrease into interest expense (10,051) (11,004) (20,202) (20,059) Total interest expense presented in the condensed consolidated statements of operations in which the effects of the cash flow hedges are recorded (63,448) (49,971) (119,149) (98,435) Derivative Instruments Not Designated as Cash Flow Hedges Unrealized (loss) gain on derivative instruments recognized in other income (expenses) (1) $ (4,467) $ 2,610 $ (7,296) $ (2,870) Realized gain on derivative instruments recognized in other income (expenses) (2) 5,144 4,626 10,292 8,522 (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) | 6 Months Ended |
Jun. 30, 2024 | |
DST PROGRAM [Abstract] | |
Schedule of DST Program Loans | The following table summarizes our DST Program Loans as of June 30, 2024 and December 31, 2023: Outstanding Unrealized Weighted-Average Weighted-Average ($ in thousands) Principal Loss, Net (1) Book Value Interest Rate Remaining Life (Years) As of June 30, 2024 DST Program Loans, carried at cost $ 127,000 $ N/A $ 127,000 5.50 % 7.55 DST Program Loans, carried at fair value 10,711 (245) 10,466 6.54 9.75 Total $ 137,711 $ (245) $ 137,466 5.58 % 7.73 As of December 31, 2023 DST Program Loans, carried at cost $ 200,276 $ N/A $ 200,276 4.98 % 7.42 DST Program Loans, carried at fair value 2,439 — 2,439 6.27 10.00 Total $ 202,715 $ N/A $ 202,715 5.00 % 7.45 (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 June 30, 2024 and December 31, 2023: DST Unamortized Total Unrealized ($ in thousands) Interests Sold (1) Program Costs Appreciation (2) Gain, Net (3) Book Value As of June 30, 2024 Financing obligations, carried at cost $ 1,057,349 $ (1,169) $ — $ N/A $ 1,056,180 Financing obligations, carried at fair value 199,783 N/A N/A (2,279) 197,504 Total $ 1,257,132 $ (1,169) $ — $ (2,279) $ 1,253,684 As of December 31, 2023 Financing obligations, carried at cost $ 1,559,200 $ (1,975) $ 14,264 $ N/A $ 1,571,489 Financing obligations, carried at fair value 87,324 N/A N/A (179) 87,145 Total $ 1,646,524 $ (1,975) $ 14,264 $ (179) $ 1,658,634 (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 and six months ended June 30, 2024 and 2023: For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 DST Interests sold $ 46,481 $ 106,718 $ 114,917 $ 217,632 DST Interests financed by DST Program Loans 3,076 18,916 8,272 32,611 Unrealized loss on DST Program Loans (245) — (245) — Unrealized gain on financing obligations 95 — 2,100 — Income earned from DST Program Loans (1) 1,920 2,089 4,316 3,920 Increase (decrease) in financing obligation liability appreciation (2) — 2,680 (6,664) 7,414 Rent obligation incurred under master lease agreements (2) 14,049 16,116 32,310 31,111 (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) | 6 Months Ended |
Jun. 30, 2024 | |
FAIR VALUE [Abstract] | |
Schedule of Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023: Total (in thousands) Level 1 Level 2 Level 3 Fair Value As of June 30, 2024 Assets Derivative instruments $ — $ 92,679 $ — $ 92,679 Available-for-sale debt securities — 148,490 — 148,490 Debt-related investments — — 208,107 208,107 DST Program Loans — — 10,466 10,466 Total assets measured at fair value $ — $ 241,169 $ 218,573 $ 459,742 Liabilities Financing obligations $ — $ — $ 197,504 $ 197,504 Total liabilities measured at fair value $ — $ — $ 197,504 $ 197,504 As of December 31, 2023 Assets Derivative instruments $ — $ 83,531 $ — $ 83,531 Available-for-sale debt securities — 55,632 — 55,632 Debt-related investments — — 129,123 129,123 DST Program Loans — — 2,439 2,439 Total assets measured at fair value $ — $ 139,163 $ 131,562 $ 270,725 Liabilities Financing obligations $ — $ — $ 87,145 $ 87,145 Total liabilities measured at fair value $ — $ — $ 87,145 $ 87,145 |
Schedule of Financial Instrument Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs | The following table presents our financial assets measured at fair value on a recurring basis using Level 3 inputs: (in thousands) DST Program Loans Debt-related investments Total Balance as of December 31, 2023 $ 2,439 $ 129,123 $ 131,562 Purchases and contributions 8,272 76,547 84,819 Unrealized loss on financial assets (245) — (245) Paid-in-kind interest — 2,437 2,437 Balance as of June 30, 2024 $ 10,466 $ 208,107 $ 218,573 |
Schedule of Financial Instrument Liabilities Measured at Fair Value on a Recurring Basis Using Level 3 Inputs | The following table presents our financial liabilities measured at fair value on a recurring basis using Level 3 inputs: (in thousands) Financing Obligations Balance as of December 31, 2023 $ 87,145 DST Interests sold, net of upfront fees 112,459 Unrealized gain on financing obligations (2,100) Balance as of June 30, 2024 $ 197,504 |
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 June 30, 2024: (in thousands) Fair Value Valuation Technique Unobservable Inputs Impact to Valuation from an Increase to Input Assets: Debt-related investments $ 208,107 Yield Method Market Yield Decrease DST Program Loans 10,466 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 197,504 Discounted Cash Flow Discount Rate Decrease 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: (in thousands) Fair Value Valuation Technique Unobservable Inputs Impact to Valuation from an Increase to Input Assets: Debt-related investments $ 129,123 Yield Method Market Yield Decrease DST Program Loans 2,439 Yield Method Market Yield Decrease Liabilities: Financing obligations $ 87,145 Discounted Cash Flow Discount Rate Decrease |
Schedule of Fair Value of Instruments Measured on a Nonrecurring Basis | As of June 30, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, other assets, and accounts payable and accrued liabilities approximate their carrying values due to 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 June 30, 2024 As of December 31, 2023 Level in Carrying Fair Carrying Fair (in thousands) Fair Value Hierarchy (1) Value (2) Value Value (2) Value Assets: DST Program Loans (3) 3 $ 127,000 $ 125,435 $ 200,276 $ 196,715 Liabilities: Line of credit 3 $ 88,000 $ 88,000 $ 570,000 $ 570,000 Term loans 3 1,150,000 1,150,000 1,150,000 1,150,000 Mortgage notes 3 2,524,616 2,426,328 1,722,325 1,647,660 Secured financings on investments in real estate debt securities 3 106,799 106,799 42,298 42,298 (1) The estimate of fair value of DST Program Loans, line of credit, term loans, mortgage notes and secured financings on investments in real estate debt securities 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. (2) The carrying value reflects the principal amount outstanding. (3) Comprised of 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) | 6 Months Ended |
Jun. 30, 2024 | |
EQUITY [Abstract] | |
Summary of Changes in Shares Outstanding for Each Class of Common Stock | The following table summarizes the changes in the shares outstanding for each class of common stock for the periods presented below: Class T Class D Class I Total (in thousands) Shares Shares Shares Shares FOR THE THREE MONTHS ENDED JUNE 30, 2023 Balance as of March 31, 2023 213,861 20,818 77,843 312,522 Issuance of common stock: Primary shares 2,107 519 1,055 3,681 DRIP 880 103 376 1,359 Stock grants, net of cancellations — — — — Redemptions (6,543) (472) (2,735) (9,750) Conversions (8,512) — 8,512 — Forfeitures — — (7) (7) Balance as of June 30, 2023 201,793 20,968 85,044 307,805 FOR THE THREE MONTHS ENDED JUNE 30, 2024 Balance as of March 31, 2024 125,151 20,023 138,897 284,071 Issuance of common stock: Primary shares 691 232 441 1,364 DRIP 719 124 918 1,761 Stock grants, net of cancellations — — 42 42 Redemptions (6,767) (1,008) (6,184) (13,959) Conversions (6,728) — 6,728 — Forfeitures — — (4) (4) Balance as of June 30, 2024 113,066 19,371 140,838 273,275 FOR THE SIX MONTHS ENDED JUNE 30, 2023 Balance as of December 31, 2022 227,265 20,577 66,702 314,544 Issuance of common stock: Primary shares 5,401 1,283 2,311 8,995 DRIP 1,808 205 706 2,719 Stock grants, net of cancellations — — 165 165 Redemptions (12,753) (1,097) (4,759) (18,609) Conversions (19,928) — 19,928 — Forfeitures — — (9) (9) Balance as of June 30, 2023 201,793 20,968 85,044 307,805 FOR THE SIX MONTHS ENDED JUNE 30, 2024 Balance as of December 31, 2023 162,838 20,410 105,358 288,606 Issuance of common stock: Primary shares 1,444 428 979 2,851 DRIP 1,522 248 1,684 3,454 Stock grants, net of cancellations — — 130 130 Redemptions (10,761) (1,476) (9,516) (21,753) Conversions (41,977) (239) 42,216 — Forfeitures — — (13) (13) Balance as of June 30, 2024 113,066 19,371 140,838 273,275 |
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 each of the quarters ended below: Amount Common Stock Declared per Distributions Other Cash Reinvested Distribution Gross (in thousands, except per share data) Common Share (1) Paid in Cash Distributions (2) in Shares Fees (3) Distributions (4) 2024 June 30 $ 0.15000 $ 16,430 $ 6,331 $ 22,114 $ 3,082 $ 47,957 March 31 0.15000 16,820 2,235 22,484 3,596 45,135 Total $ 0.30000 $ 33,250 $ 8,566 $ 44,598 $ 6,678 $ 93,092 2023 December 31 $ 0.15000 $ 16,483 $ 1,270 $ 22,196 $ 4,987 $ 44,936 September 30 0.15000 16,825 1,296 22,550 5,721 46,392 June 30 0.13625 15,490 1,177 20,357 6,344 43,368 March 31 0.13625 15,284 1,107 20,653 6,806 43,850 Total $ 0.57250 $ 64,082 $ 4,850 $ 85,756 $ 23,858 $ 178,546 (1) Amounts reflect the quarterly distribution rate authorized by our board of directors per Class T share, per Class D share, and per Class I 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 and Class D shares of common stock are reduced by the respective distribution fees that are payable with respect to such Class T shares and Class D shares. (2) Consists of distribution fees paid to 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 and Class D shares issued in the primary portion of our securities offerings only. All or a portion of these amounts will be retained by, or reallowed (paid) to, participating broker-dealers and servicing broker-dealers. Refer to “Note 11” for further detail regarding distribution fees. (4) Gross distributions are total distributions before the deduction of any distribution fees relating to Class T shares and Class D shares issued in the primary portion of our securities offerings. |
Summary of Share Redemption Activity | Below is a summary of redemptions pursuant to our share redemption program for the six months ended June 30, 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 make exceptions to, modify or suspend our current share redemption programs if it deems such action to be in the best interest of our stockholders: For the Six Months Ended June 30, (in thousands, except per share data) 2024 2023 Number of shares redeemed 21,753 18,609 Aggregate dollar amount of shares redeemed $ 279,172 $ 280,939 Average redemption price per share $ 12.83 $ 15.10 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
REDEEMABLE NONCONTROLLING INTERESTS [Abstract] | |
Schedule of Redeemable Noncontrolling Interest Activity | The following table summarizes the redeemable noncontrolling interests activity for the six months ended June 30, 2024 and 2023: For the Six Months Ended June 30, 2024 For the Six Months Ended June 30, 2023 ($ and units in thousands) $ Units $ Units Balance at beginning of the year $ 114,310 8,346 $ 69,553 4,532 Settlement of prior year performance participation allocation (1) — — 62,667 4,106 Distributions to redeemable noncontrolling interests (2,504) — (2,284) — Redemptions of redeemable noncontrolling interests (1,000) (79) — — Net loss attributable to redeemable noncontrolling interests (1,586) — (3,018) — Change from cash flow hedging activities and available-for-sale debt securities attributable to redeemable noncontrolling interests 487 — 59 — Redemption value allocation adjustment to redeemable noncontrolling interests (2) (1,715) — (911) — Ending balance $ 107,992 8,267 $ 126,066 8,638 (1) The performance hurdle was not met for the year ended December 31, 2023 and no performance participation allocation expense was recognized. The 2022 performance participation allocation in the amount of $140.5 million became payable on December 31, 2022, and the Advisor elected to settle a portion of the amount owed in cash in the amount of $77.8 million, and the remainder in 4.1 million Class I OP Units in January 2023 to the holder of a separate series of partnership interests in the Operating Partnership with special distribution rights (the “Special Units”), AIREIT Incentive Fee LP (the “Special Unit Holder”). (2) Represents the adjustment recorded to mark to the redemption value, which is equivalent to fair value, as of June 30, 2024 and 2023. |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
NONCONTROLLING INTERESTS [Abstract] | |
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 Six Months Ended June 30, (in thousands) 2024 2023 Balance at beginning of the period — — Issuance of units 33,792 — Balance at end of the period 33,792 — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
Schedule of Fees and Expenses Incurred by Company | 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 June 30, For the Six Months Ended June 30, Receivable (Payable) as of (in thousands) 2024 2023 2024 2023 June 30, 2024 December 31, 2023 Selling commissions and dealer manager fees (1) $ 326 $ 1,175 $ 678 $ 3,183 $ — $ — Ongoing distribution fees (1)(2) 3,896 6,344 7,642 13,150 (1,252) (1,549) Advisory fee—fixed component 16,495 18,965 33,502 38,219 (5,458) (5,813) Other expense reimbursements (3)(4) 3,369 2,601 6,657 5,940 (3,368) (2,799) Property accounting fee (5) 899 856 1,742 1,680 (295) 129 DST Program selling commissions, dealer manager fees and distribution fees (1) 1,131 1,564 2,549 3,002 (615) (852) Other DST Program related costs (4) 747 1,411 1,785 2,916 (145) (215) Development fees (6) 211 176 503 867 (163) (588) Total $ 27,074 $ 33,092 $ 55,058 $ 68,957 $ (11,296) $ (11,687) (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 $86.9 million and $64.5 million as of June 30, 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 6, allocated rent paid to both third parties and affiliates of the 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 limited 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. (6) Development fees are included in the total development project costs of the respective properties and are capitalized in construction in progress, which is included in net investment in real estate properties on our condensed consolidated balance sheets. Amounts also include our proportionate share of development acquisition fees relating to our joint venture partnership, which are included in investment in unconsolidated joint venture partnership on our condensed consolidated balance sheets. |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
NET INCOME (LOSS) PER COMMON SHARE [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders | The computation of our basic and diluted net income (loss) per share attributable to common stockholders is as follows: For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Net loss attributable to common stockholders—basic $ (43,370) $ (48,257) $ (53,048) $ (113,069) Net loss attributable to redeemable noncontrolling interests (1,304) (1,346) (1,586) (3,018) Net (loss) income attributable to noncontrolling interests (5,270) 10 (5,478) 19 Net loss attributable to common stockholders—diluted $ (49,944) $ (49,593) $ (60,112) $ (116,068) Weighted-average shares outstanding—basic 277,521 309,616 281,755 311,543 Incremental weighted-average shares outstanding—diluted 42,139 8,638 28,454 8,366 Weighted-average shares outstanding—diluted 319,660 318,254 310,209 319,909 Net loss per share attributable to common stockholders: Basic $ (0.16) $ (0.16) $ (0.19) $ (0.36) Diluted $ (0.16) $ (0.16) $ (0.19) $ (0.36) |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | |
Schedule of Supplemental Cash Flow Non-Cash Investing and Financing Activities | Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows: For the Six Months Ended June 30, (in thousands) 2024 2023 Supplemental disclosure of non-cash investing and financing activities: Distributions reinvested in common stock 44,675 41,093 Increase in DST Program Loans receivable through DST Program capital raising 8,272 32,611 Issuances of OP Units for DST Interests 436,174 — Redeemable noncontrolling interests issued as settlement of performance participation allocation — 62,667 Increase (decrease) in accrued future ongoing distribution fees 22,349 (11,825) (Decrease) increase in accrued capital expenditures (24,131) (4,853) Non-cash selling commissions and dealer manager fees 678 3,183 |
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | Restricted cash consists of lender, insurance and property-related escrow accounts, as well as utility deposits. 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 Six Months Ended June 30, (in thousands) 2024 2023 Beginning of period: Cash and cash equivalents $ 14,322 $ 79,524 Restricted cash 620 499 Cash, cash equivalents and restricted cash $ 14,942 $ 80,023 End of period: Cash and cash equivalents $ 31,431 $ 52,525 Restricted cash 3,091 488 Cash, cash equivalents and restricted cash $ 34,522 $ 53,013 |
INVESTMENTS IN REAL ESTATE PR_3
INVESTMENTS IN REAL ESTATE PROPERTIES (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 USD ($) building | Jun. 30, 2024 USD ($) building | Dec. 31, 2023 building | |
Real Estate Properties [Line Items] | |||
Number of industrial properties | building | 250 | 250 | 256 |
Number of real estate properties owned are in construction | building | 1 | 1 | 1 |
Number of real estate properties owned are in pre-construction | building | 1 | 1 | 1 |
Proceeds from disposition of real estate properties | $ | $ 207,822 | ||
Net gain on sale of real estate property | $ | $ 6,187 | $ 43,529 | |
Disposed by sale | Industrial buildings | |||
Real Estate Properties [Line Items] | |||
Number of industrial properties | building | 10 | 10 | |
Proceeds from disposition of real estate properties | $ | $ 207,800 | ||
Net gain on sale of real estate property | $ | $ 43,500 |
INVESTMENTS IN REAL ESTATE PR_4
INVESTMENTS IN REAL ESTATE PROPERTIES (Investment in Properties) (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
INVESTMENTS IN REAL ESTATE PROPERTIES [Abstract] | ||
Land | $ 1,298,884 | $ 1,300,059 |
Building and improvements | 5,578,091 | 5,486,636 |
Intangible lease assets | 505,774 | 498,053 |
Construction in progress | 137,410 | 219,659 |
Investment in real estate properties | 7,520,159 | 7,504,407 |
Less accumulated depreciation and amortization | (877,011) | (750,429) |
Net investment in real estate properties | $ 6,643,148 | $ 6,753,978 |
INVESTMENTS IN REAL ESTATE PR_5
INVESTMENTS IN REAL ESTATE PROPERTIES (Schedule of Asset Acquisitions) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) building property | Dec. 31, 2023 building | |
Asset Acquisition [Line Items] | ||
Number of real estate properties | building | 250 | 256 |
Percentage of assets acquired | 100% | |
Intangible lease assets | ||
Asset Acquisition [Line Items] | ||
Weighted-average amortization period of acquired finite-lived intangible assets | 2 years 8 months 12 days | |
Asset Acquisition | ||
Asset Acquisition [Line Items] | ||
Number of real estate properties | property | 4 | |
Total Purchase Price | $ 148,949 | |
Debt assumed at fair value | $ 0 | |
Plainfield Distribution Center I&II | ||
Asset Acquisition [Line Items] | ||
Number of real estate properties | property | 2 | |
Total Purchase Price | $ 78,087 | |
Baymeadow Commerce Center | ||
Asset Acquisition [Line Items] | ||
Number of real estate properties | property | 1 | |
Total Purchase Price | $ 18,051 | |
Nashville Logistics Center | ||
Asset Acquisition [Line Items] | ||
Number of real estate properties | property | 1 | |
Total Purchase Price | $ 52,811 |
INVESTMENTS IN REAL ESTATE PR_6
INVESTMENTS IN REAL ESTATE PROPERTIES (Purchase Price Allocation) (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Asset Acquisition [Line Items] | |
Land | $ 24,212 |
Building and improvements | 115,403 |
Intangible lease assets | 13,007 |
Below-market lease liabilities | (3,673) |
Total purchase price | 148,949 |
Asset Acquisition | |
Asset Acquisition [Line Items] | |
Debt assumed at fair value | $ 0 |
INVESTMENTS IN REAL ESTATE PR_7
INVESTMENTS IN REAL ESTATE PROPERTIES (Summary of Intangible Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | $ 505,774 | $ 498,053 |
Below Market Lease [Roll Forward] | ||
Gross | (132,467) | (129,823) |
Accumulated Amortization | 63,134 | 54,682 |
Net | (69,333) | (75,141) |
Intangible lease assets | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | 493,429 | 485,184 |
Accumulated Amortization | (274,578) | (243,878) |
Total | 218,851 | 241,306 |
Above-market lease assets | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | 12,345 | 12,869 |
Accumulated Amortization | (6,547) | (5,916) |
Total | $ 5,798 | $ 6,953 |
INVESTMENTS IN REAL ESTATE PR_8
INVESTMENTS IN REAL ESTATE PROPERTIES (Summary of Rental Revenue Adjustments and Depreciation and Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Increase (Decrease) to Rental Revenue: | ||||
Straight-line rent adjustments | $ 4,009 | $ 4,117 | $ 8,224 | $ 7,215 |
Real Estate-Related Depreciation and Amortization: | ||||
Depreciation expense | 54,758 | 51,472 | 108,516 | 101,907 |
Intangible lease asset amortization | 17,458 | 20,537 | 35,930 | 42,433 |
Above-market lease assets | ||||
Increase (Decrease) to Rental Revenue: | ||||
Amortization of above and below Market Leases | (417) | (530) | (856) | (1,083) |
Below Market Lease | ||||
Increase (Decrease) to Rental Revenue: | ||||
Amortization of above and below Market Leases | $ 4,414 | $ 5,342 | $ 8,930 | $ 11,617 |
INVESTMENTS IN REAL ESTATE DE_3
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES (Debt Related Securities) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Schedule of Held-to-Maturity Securities [Line Items] | ||
Total commitment | $ 249,524 | $ 174,770 |
Outstanding Principal | 208,107 | 129,123 |
Fair Value | $ 208,107 | $ 129,123 |
Interest Rate | 9% | 8.94% |
Weighted-average remaining term | 2 years 1 month 6 days | 2 years 6 months |
Senior Debt Obligations | TX | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Total commitment | $ 60,860 | $ 60,860 |
Outstanding Principal | 49,289 | 29,700 |
Fair Value | $ 49,289 | $ 29,700 |
Interest Rate | 9.18% | 9.21% |
Senior Debt Obligations | NY | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Total commitment | $ 113,910 | $ 113,910 |
Outstanding Principal | 101,897 | 99,423 |
Fair Value | $ 101,897 | $ 99,423 |
Interest Rate | 8.83% | 8.86% |
Senior Debt Obligations | TX | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Total commitment | $ 36,404 | |
Outstanding Principal | 19,921 | |
Fair Value | $ 19,921 | |
Interest Rate | 10.08% | |
Senior Debt Obligations | NC | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Total commitment | $ 38,350 | |
Outstanding Principal | 37,000 | |
Fair Value | $ 37,000 | |
Interest Rate | 8.58% |
INVESTMENTS IN REAL ESTATE DE_4
INVESTMENTS IN REAL ESTATE DEBT AND SECURITIES (Available-for-Sale Debt Securities) (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-Sale [Line Items] | ||
Credit losses | $ 0 | $ 0 |
Face Amount | 150,152 | 57,326 |
Amortized Cost | 148,086 | 55,186 |
Unamortized Discount | 2,066 | 2,140 |
Unrealized Gain, Net | 404 | 446 |
Fair Value | $ 148,490 | $ 55,632 |
Weighted Average | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Available-for-sale debt securities, contractual maturity term | 4 years | 3 years 2 months 12 days |
DEBT (Schedule of Debt) (Detail
DEBT (Schedule of Debt) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
DEBT | |||||
Weighted-Average Effective Interest Rate | 4.38% | 4.38% | 4.17% | ||
Principal amount | $ 3,762,616 | $ 3,762,616 | $ 3,442,325 | ||
Less unamortized debt issuance costs | (34,230) | (34,230) | (21,359) | ||
Add unamortized mark-to-market adjustment on assumed debt | 110 | 110 | 215 | ||
Total debt, net | 3,728,496 | 3,728,496 | 3,421,181 | ||
Gross book value of properties encumbered by debt | 3,835,742 | 3,835,742 | $ 2,596,052 | ||
Interest incurred, excluding amortization | 49,100 | $ 33,600 | 94,300 | $ 64,500 | |
Capitalized interest | 3,900 | 4,800 | 9,000 | 9,300 | |
Interest rate cap premiums. | $ 3,000 | $ 400 | $ 5,800 | $ 600 | |
Weighted Average | |||||
DEBT | |||||
Remaining debt term (in years) | 2 years 1 month 6 days | ||||
Line of Credit | |||||
DEBT | |||||
Weighted-Average Effective Interest Rate | 3.67% | 3.67% | 6.20% | ||
Principal amount | $ 88,000 | $ 88,000 | $ 570,000 | ||
Total commitments for line of credit | 1,000,000 | ||||
Debt Instrument, Unused Borrowing Capacity, Fee | 912,000 | ||||
Unused portion under the line of credit | 484,300 | $ 484,300 | |||
Line of Credit | SOFR | |||||
DEBT | |||||
Basis spread on variable rate | 0.10% | 0.10% | |||
Line of Credit | SOFR | Minimum | |||||
DEBT | |||||
Basis spread on variable rate | 1.25% | 1.25% | |||
Line of Credit | SOFR | Maximum | |||||
DEBT | |||||
Basis spread on variable rate | 2% | 2% | |||
Line of Credit | Base Rate | Minimum | |||||
DEBT | |||||
Basis spread on variable rate | 0.25% | 0.25% | |||
Line of Credit | Base Rate | Maximum | |||||
DEBT | |||||
Basis spread on variable rate | 1% | 1% | |||
Term Loan | |||||
DEBT | |||||
Principal amount | $ 1,150,000 | $ 1,150,000 | |||
Term Loan (Maturity date March 2027) | |||||
DEBT | |||||
Weighted-Average Effective Interest Rate | 3.54% | 3.54% | 3.35% | ||
Principal amount | $ 550,000 | $ 550,000 | $ 550,000 | ||
Unused and available portions under the term loan | 550,000 | $ 550,000 | |||
Term Loan (Maturity date March 2027) | SOFR | Minimum | |||||
DEBT | |||||
Basis spread on variable rate | 1.20% | 1.20% | |||
Term Loan (Maturity date March 2027) | SOFR | Maximum | |||||
DEBT | |||||
Basis spread on variable rate | 1.90% | 1.90% | |||
Term Loan (Maturity date March 2027) | SOFR | Interest Rate Swap | |||||
DEBT | |||||
Principal amount | 200,000 | $ 200,000 | |||
Term Loan (Maturity date March 2027) | SOFR | Interest Rate Caps | |||||
DEBT | |||||
Principal amount | $ 350,000 | $ 350,000 | |||
Term Loan (Maturity date March 2027) | Base Rate | Minimum | |||||
DEBT | |||||
Basis spread on variable rate | 0.20% | 0.20% | |||
Term Loan (Maturity date March 2027) | Base Rate | Maximum | |||||
DEBT | |||||
Basis spread on variable rate | 0.90% | 0.90% | |||
Term Loan (Maturity date May 2026) | |||||
DEBT | |||||
Weighted-Average Effective Interest Rate | 3.47% | 3.47% | 3.42% | ||
Principal amount | $ 600,000 | $ 600,000 | $ 600,000 | ||
Unused and available portions under the term loan | 600,000 | $ 600,000 | |||
Term Loan (Maturity date May 2026) | SOFR | |||||
DEBT | |||||
Basis spread on variable rate | 0.11448% | 0.11448% | |||
Term Loan (Maturity date May 2026) | SOFR | Minimum | |||||
DEBT | |||||
Basis spread on variable rate | 1.35% | 1.35% | |||
Term Loan (Maturity date May 2026) | SOFR | Maximum | |||||
DEBT | |||||
Basis spread on variable rate | 2.20% | 2.20% | |||
Term Loan (Maturity date May 2026) | SOFR | Interest Rate Swap | |||||
DEBT | |||||
Principal amount | 525,000 | $ 525,000 | |||
Term Loan (Maturity date May 2026) | SOFR | Interest Rate Caps | |||||
DEBT | |||||
Principal amount | $ 75,000 | $ 75,000 | |||
Term Loan (Maturity date May 2026) | Base Rate | Minimum | |||||
DEBT | |||||
Basis spread on variable rate | 0.35% | 0.35% | |||
Term Loan (Maturity date May 2026) | Base Rate | Maximum | |||||
DEBT | |||||
Basis spread on variable rate | 1.20% | 1.20% | |||
Fixed-rate mortgage notes | |||||
DEBT | |||||
Weighted-Average Effective Interest Rate | 4.01% | 4.01% | 3.58% | ||
Principal amount | $ 1,200,720 | $ 1,200,720 | $ 996,720 | ||
Fixed-rate mortgage notes | Minimum | |||||
DEBT | |||||
Interest rates (as a percent) | 2.85% | 2.85% | 2.85% | ||
Fixed-rate mortgage notes | Maximum | |||||
DEBT | |||||
Interest rates (as a percent) | 6.09% | 6.09% | 6.09% | ||
Fixed Rate Secured Mortgage Note Maturity July 2025 [Member] | |||||
DEBT | |||||
Principal amount | $ 367,800 | $ 367,800 | |||
Face amount | $ 367,800 | $ 367,800 | |||
Floating-rate mortgage notes | |||||
DEBT | |||||
Weighted-Average Effective Interest Rate | 5.54% | 5.54% | 4.48% | ||
Principal amount | $ 1,323,896 | $ 1,323,896 | $ 725,605 | ||
Variable Rate Secured Mortgage Note Maturity January 2025 | |||||
DEBT | |||||
Face amount | 408,000 | $ 408,000 | |||
Variable Rate Secured Mortgage Note Maturity January 2025 | SOFR | |||||
DEBT | |||||
Basis spread on variable rate | 1.65% | ||||
Variable Rate Secured Mortgage Note Maturity July 2025 | |||||
DEBT | |||||
Face amount | 209,300 | $ 209,300 | |||
Variable Rate Secured Mortgage Note Maturity July 2025 | SOFR | |||||
DEBT | |||||
Basis spread on variable rate | 1.50% | ||||
Variable Rate Secured Mortgage Note Maturity July 2026 | |||||
DEBT | |||||
Face amount | 590,000 | $ 590,000 | |||
Variable Rate Secured Mortgage Note Maturity July 2026 | SOFR | |||||
DEBT | |||||
Basis spread on variable rate | 2.33% | ||||
Variable Rate Secured Mortgage Note Maturity October 2026 | |||||
DEBT | |||||
Principal amount | 116,600 | $ 116,600 | |||
Face amount | $ 129,100 | $ 129,100 | |||
Variable Rate Secured Mortgage Note Maturity October 2026 | SOFR | |||||
DEBT | |||||
Basis spread on variable rate | 3.30% |
DEBT (Principal Payments on Deb
DEBT (Principal Payments on Debt) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) item | Dec. 31, 2023 USD ($) | |
DEBT | ||
Remainder of 2024 | $ 38,000 | |
2025 | 1,073,080 | |
2026 | 1,306,646 | |
2027 | 883,750 | |
Thereafter | 461,140 | |
Total principal payments | 3,762,616 | $ 3,442,325 |
Line of Credit | ||
DEBT | ||
2025 | 88,000 | |
Total principal payments | $ 88,000 | 570,000 |
Term of extension option | 1 year | |
Number of extension options for extension term | item | 2 | |
Term Loan | ||
DEBT | ||
2026 | $ 600,000 | |
2027 | 550,000 | |
Total principal payments | 1,150,000 | |
Mortgages Notes | ||
DEBT | ||
Remainder of 2024 | 38,000 | |
2025 | 985,080 | |
2026 | 706,646 | |
2027 | 333,750 | |
Thereafter | 461,140 | |
Total principal payments | 2,524,616 | |
Fixed-rate mortgage notes | ||
DEBT | ||
Total principal payments | 1,200,720 | 996,720 |
Fixed Rate Secured Mortgage Note Maturity July 2025 [Member] | ||
DEBT | ||
Face amount | 367,800 | |
Total principal payments | $ 367,800 | |
Term of extension option | 1 year | |
Number of extension options for extension term | item | 2 | |
Fixed Rate Secured Mortgage Note Maturity May 2027 [Member] | ||
DEBT | ||
Total principal payments | $ 222,300 | |
Term of extension option | 1 year | |
Number of extension options for extension term | item | 2 | |
Floating-rate mortgage notes | ||
DEBT | ||
Total principal payments | $ 1,323,896 | $ 725,605 |
Variable Rate Secured Mortgage Note Maturity January 2025 | ||
DEBT | ||
Face amount | $ 408,000 | |
Term of extension option | 1 year | |
Number of extension options for extension term | item | 2 | |
Variable Rate Secured Mortgage Note Maturity July 2025 | ||
DEBT | ||
Face amount | $ 209,300 | |
Term of extension option | 1 year | |
Variable Rate Secured Mortgage Note Maturity October 2026 | ||
DEBT | ||
Face amount | $ 129,100 | |
Total principal payments | $ 116,600 | |
Term of extension option | 1 year | |
Number of extension options for extension term | item | 2 | |
Variable Rate Secured Mortgage Note Maturity July 2026 | ||
DEBT | ||
Face amount | $ 590,000 | |
Term of extension option | 1 year | |
Number of extension options for extension term | item | 3 |
DEBT (Secured Financings) (Deta
DEBT (Secured Financings) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | Dec. 31, 2023 | |
DEBT | |||
Outstanding amount | $ 106,799 | $ 106,799 | $ 42,298 |
Morgan Stanley Bank, N.A. | |||
DEBT | |||
Outstanding amount | 106,800 | 106,800 | |
Fair value | 148,500 | 148,500 | |
Interest costs incurred | $ 1,100 | $ 1,700 | |
SOFR | Morgan Stanley Bank, N.A. | Minimum | |||
DEBT | |||
Basis spread on variable rate | 0.75% | ||
SOFR | Morgan Stanley Bank, N.A. | Maximum | |||
DEBT | |||
Basis spread on variable rate | 1.20% |
DEBT (Summary of Location and F
DEBT (Summary of Location and Fair Value of Derivative Instruments) (Details) $ in Thousands | Jun. 30, 2024 USD ($) contract | Dec. 31, 2023 USD ($) contract |
DEBT | ||
Decrease in cash flow hedge to be reclassified in next twelve months | $ 31,500 | |
Number of Contracts | contract | 23 | 23 |
Notional Amount | $ 2,964,940 | $ 2,324,940 |
Fair Value | $ 92,679 | $ 83,531 |
Interest Rate Swap | Cash Flow Hedges | Designated as Hedging Instrument | ||
DEBT | ||
Number of Contracts | contract | 10 | 11 |
Notional Amount | $ 1,092,830 | $ 1,142,830 |
Fair Value | $ 51,538 | $ 41,091 |
Interest Rate Caps | Not Designated as Hedging Instrument | ||
DEBT | ||
Number of Contracts | contract | 5 | 4 |
Notional Amount | $ 797,110 | $ 707,110 |
Fair Value | $ 8,313 | $ 14,887 |
Interest Rate Caps | Cash Flow Hedges | Designated as Hedging Instrument | ||
DEBT | ||
Number of Contracts | contract | 9 | 8 |
Notional Amount | $ 1,075,000 | $ 475,000 |
Fair Value | 32,828 | $ 27,553 |
Variable Rate Secured Mortgage Note Maturity July 2026 | Interest Rate Caps | Cash Flow Hedges | ||
DEBT | ||
Notional Amount | 590,000 | |
Variable Rate Secured Mortgage Note Maturity July 2026 | Interest Rate Caps | Cash Flow Hedges | Not Designated as Hedging Instrument | ||
DEBT | ||
Notional Amount | 90,000 | |
Variable Rate Secured Mortgage Note Maturity July 2026 | Interest Rate Caps | Cash Flow Hedges | Designated as Hedging Instrument | ||
DEBT | ||
Notional Amount | $ 500,000 |
DEBT (Effect of Derivative Fina
DEBT (Effect of Derivative Financial Instruments on Financial Statements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
DEBT | ||||
Total interest expense presented in the condensed consolidated statements of operations in which the effects of the cash flow hedges are recorded | $ 63,448 | $ 49,971 | $ 119,149 | $ 98,435 |
Unrealized (loss) gain on derivative instruments recognized in other income (expenses) | (7,296) | (2,870) | ||
Designated as Hedging Instrument | ||||
DEBT | ||||
Total interest expense presented in the condensed consolidated statements of operations in which the effects of the cash flow hedges are recorded | (63,448) | (49,971) | (119,149) | (98,435) |
Not Designated as Hedging Instrument | ||||
DEBT | ||||
Unrealized (loss) gain on derivative instruments recognized in other income (expenses) | (4,467) | 2,610 | (7,296) | (2,870) |
Realized gain on derivative instruments recognized in other income (expenses) | $ 5,144 | $ 4,626 | $ 10,292 | $ 8,522 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
Cash Flow Hedges | Designated as Hedging Instrument | ||||
DEBT | ||||
Gain recognized in AOCI | $ 9,186 | $ 31,575 | $ 37,717 | $ 20,322 |
Amount reclassified from AOCI as a decrease into interest expense | $ (10,051) | $ (11,004) | $ (20,202) | $ (20,059) |
DST PROGRAM (Program Activity)
DST PROGRAM (Program Activity) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Delaware Statutory Trust Programs [Line Items] | ||
Total DST Program Loans | $ 137,466 | $ 202,715 |
Carried at cost | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Outstanding Principal | 127,000 | 200,276 |
Total DST Program Loans | $ 127,000 | $ 200,276 |
Carried at cost | Weighted Average | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Interest Rate (in %) | 5.50% | 4.98% |
DST Program Loans - Remaining Life (in years) | 7 years 6 months 18 days | 7 years 5 months 1 day |
Carried at fair value | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Outstanding Principal | $ 10,711 | $ 2,439 |
DST Program Loans - Unrealized Loss, Net | (245) | |
Total DST Program Loans | $ 10,466 | $ 2,439 |
Carried at fair value | Weighted Average | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Interest Rate (in %) | 6.54% | 6.27% |
DST Program Loans - Remaining Life (in years) | 9 years 9 months | 10 years |
Total | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Outstanding Principal | $ 137,711 | $ 202,715 |
DST Program Loans - Unrealized Loss, Net | (245) | |
Total DST Program Loans | $ 137,466 | $ 202,715 |
Total | Weighted Average | ||
Delaware Statutory Trust Programs [Line Items] | ||
DST Program Loans - Interest Rate (in %) | 5.58% | 5% |
DST Program Loans - Remaining Life (in years) | 7 years 8 months 23 days | 7 years 5 months 12 days |
DST PROGRAM (Financing Obligati
DST PROGRAM (Financing Obligations) (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Book Value | $ 197,504 | $ 87,145 |
Carried at cost | ||
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Outstanding Liability | 1,057,349 | 1,559,200 |
Financing obligations - Unamortized Program Costs | (1,169) | (1,975) |
Financing obligations - Total Appreciation | 14,264 | |
Financing obligations - Book Value | 1,056,180 | 1,571,489 |
Carried at fair value | ||
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Outstanding Liability | 199,783 | 87,324 |
Financing obligations - Unrealized Gain, Net | (2,279) | (179) |
Financing obligations - Book Value | 197,504 | 87,145 |
Total | ||
Delaware Statutory Trust Programs [Line Items] | ||
Financing obligations - Outstanding Liability | 1,257,132 | 1,646,524 |
Financing obligations - Unamortized Program Costs | (1,169) | (1,975) |
Financing obligations - Total Appreciation | 14,264 | |
Financing obligations - Unrealized Gain, Net | (2,279) | (179) |
Financing obligations - Book Value | $ 1,253,684 | $ 1,658,634 |
DST PROGRAM (DST Program Activi
DST PROGRAM (DST Program Activity) (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Delaware Statutory Trust Programs [Line Items] | ||||
DST Interests sold | $ 46,481 | $ 106,718 | $ 114,917 | $ 217,632 |
DST Interests financed by DST Program Loans | 3,076 | 18,916 | 8,272 | 32,611 |
Unrealized loss on DST Program Loans | (245) | (245) | ||
Unrealized gain on financing obligations | 95 | 2,100 | ||
Income earned from DST Program Loans (1) | 1,920 | 2,089 | 4,316 | 3,920 |
(Decrease) increase in financing obligation liability appreciation (2) | 2,680 | (6,664) | 7,414 | |
Rent obligation incurred under master lease agreements (2) | 14,049 | $ 16,116 | 32,310 | 31,111 |
Net Investment | $ 307,321 | $ 436,174 | ||
D S T Program | Operating Partnership Units | ||||
Delaware Statutory Trust Programs [Line Items] | ||||
Issuance of OP Units (in shares) | 33.8 | |||
Net Investment | $ 436,200 | $ 0 |
FAIR VALUE (Recurring Basis) (D
FAIR VALUE (Recurring Basis) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) loan | Dec. 31, 2023 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | $ 92,679 | $ 83,531 |
Available-for-sale debt securities | 148,490 | 55,632 |
Debt-related investments | 208,107 | 129,123 |
Financing obligations | 197,504 | 87,145 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 92,679 | 83,531 |
Available-for-sale debt securities | 148,490 | 55,632 |
Debt-related investments | 208,107 | 129,123 |
DST Program Loans | 10,466 | 2,439 |
Total assets measured at fair value | 459,742 | 270,725 |
Financing obligations | 197,504 | 87,145 |
Total liabilities measured at fair value | 197,504 | 87,145 |
Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments | 92,679 | 83,531 |
Available-for-sale debt securities | 148,490 | 55,632 |
Total assets measured at fair value | $ 241,169 | 139,163 |
Level 3 | Senior Debt Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of contract on debt securities | loan | 4 | |
Level 3 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt-related investments | $ 208,107 | 129,123 |
DST Program Loans | 10,466 | 2,439 |
Total assets measured at fair value | 218,573 | 131,562 |
Financing obligations | 197,504 | 87,145 |
Total liabilities measured at fair value | $ 197,504 | $ 87,145 |
FAIR VALUE (Financial Instrumen
FAIR VALUE (Financial Instrument Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 131,562 |
Purchases and contributions | 84,819 |
Unrealized loss on financing assets | $ (245) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Beneficial Interests Unrealized Gain (Loss) |
Paid-in-kind interest | $ 2,437 |
Ending balance | 218,573 |
DST Program Loans | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 2,439 |
Purchases and contributions | 8,272 |
Unrealized loss on financing assets | (245) |
Ending balance | 10,466 |
Debt-related investments | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 129,123 |
Purchases and contributions | 76,547 |
Paid-in-kind interest | 2,437 |
Ending balance | $ 208,107 |
FAIR VALUE (Financial Instrum_2
FAIR VALUE (Financial Instrument Liabilities Measured at Fair Value on a Recurring Basis Using Level 3 Inputs) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
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 [Line Items] | |
Beginning balance | $ 87,145 |
DST Interests sold, net of upfront fees | 112,459 |
Unrealized gain on financing obligations | (2,100) |
Ending balance | $ 197,504 |
FAIR VALUE (Quantitative Inputs
FAIR VALUE (Quantitative Inputs and Assumptions) (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | $ 148,490 | $ 55,632 |
DST Program Loans | 10,466 | 2,439 |
Financing obligations | 197,504 | 87,145 |
Level 3 | Yield Method | Market Yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair Value | 208,107 | 129,123 |
DST Program Loans | 10,466 | 2,439 |
Level 3 | Discounted Cash Flow | Discount Rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Financing obligations | $ 197,504 | $ 87,145 |
FAIR VALUE (Nonrecurring Basis)
FAIR VALUE (Nonrecurring Basis) (Details) - Nonrecurring - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Carrying Value | ||
Assets: | ||
DST Program Loans | $ 127,000 | $ 200,276 |
Carrying Value | Line of Credit | ||
Liabilities: | ||
Debt instruments, fair value disclosure | 88,000 | 570,000 |
Carrying Value | Term Loan | ||
Liabilities: | ||
Debt instruments, fair value disclosure | 1,150,000 | 1,150,000 |
Carrying Value | Mortgages Notes | ||
Liabilities: | ||
Debt instruments, fair value disclosure | 2,524,616 | 1,722,325 |
Carrying Value | Secured Debt | ||
Liabilities: | ||
Debt instruments, fair value disclosure | 106,799 | 42,298 |
Fair Value | ||
Assets: | ||
DST Program Loans | 125,435 | 196,715 |
Fair Value | Line of Credit | ||
Liabilities: | ||
Debt instruments, fair value disclosure | 88,000 | 570,000 |
Fair Value | Term Loan | ||
Liabilities: | ||
Debt instruments, fair value disclosure | 1,150,000 | 1,150,000 |
Fair Value | Mortgages Notes | ||
Liabilities: | ||
Debt instruments, fair value disclosure | 2,426,328 | 1,647,660 |
Fair Value | Secured Debt | ||
Liabilities: | ||
Debt instruments, fair value disclosure | $ 106,799 | $ 42,298 |
EQUITY (Narrative) (Details)
EQUITY (Narrative) (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Aug. 04, 2021 | |
Class of Stock [Line Items] | |||||
Dollar value of primary shares of common stock in offering | $ 5,000,000 | ||||
Issuance of common stock | $ 39,867 | $ 76,691 | $ 82,279 | $ 180,481 | |
Issuance of common stock, shares | 6.3 | ||||
DRIP | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock | $ 44,700 |
EQUITY (Summary of Changes in S
EQUITY (Summary of Changes in Shares Outstanding for Each Class of Common Stock) (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Redemptions | (21,753) | (18,609) | |||
Class T Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance, shares | 162,838 | ||||
Ending balance, shares | 113,066 | 113,066 | |||
Common stock, shares issued | 113,066 | 113,066 | 162,838 | ||
Class D Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance, shares | 20,410 | ||||
Ending balance, shares | 19,371 | 19,371 | |||
Common stock, shares issued | 19,371 | 19,371 | 20,410 | ||
Class I Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance, shares | 105,358 | ||||
Ending balance, shares | 140,838 | 140,838 | |||
Common stock, shares issued | 140,838 | 140,838 | 105,358 | ||
Common Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance, shares | 284,071 | 312,522 | 288,606 | 314,544 | |
Primary shares | 1,364 | 3,681 | 2,851 | 8,995 | |
DRIP | 1,761 | 1,359 | 3,454 | 2,719 | |
Stock grants, net of cancellations | 42 | 130 | 165 | ||
Redemptions | (13,959) | (9,750) | (21,753) | (18,609) | |
Forfeitures | (4) | (7) | (13) | (9) | |
Ending balance, shares | 273,275 | 307,805 | 273,275 | 307,805 | |
Common Stock | Class T Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance, shares | 125,151 | 213,861 | 162,838 | 227,265 | |
Primary shares | 691 | 2,107 | 1,444 | 5,401 | |
DRIP | 719 | 880 | 1,522 | 1,808 | |
Redemptions | (6,767) | (6,543) | (10,761) | (12,753) | |
Conversions | (6,728) | (8,512) | (41,977) | (19,928) | |
Ending balance, shares | 113,066 | 201,793 | 113,066 | 201,793 | |
Common Stock | Class D Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance, shares | 20,023 | 20,818 | 20,410 | 20,577 | |
Primary shares | 232 | 519 | 428 | 1,283 | |
DRIP | 124 | 103 | 248 | 205 | |
Redemptions | (1,008) | (472) | (1,476) | (1,097) | |
Conversions | (239) | ||||
Ending balance, shares | 19,371 | 20,968 | 19,371 | 20,968 | |
Common Stock | Class I Shares | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Beginning balance, shares | 138,897 | 77,843 | 105,358 | 66,702 | |
Primary shares | 441 | 1,055 | 979 | 2,311 | |
DRIP | 918 | 376 | 1,684 | 706 | |
Stock grants, net of cancellations | 42 | 130 | 165 | ||
Redemptions | (6,184) | (2,735) | (9,516) | (4,759) | |
Conversions | 6,728 | 8,512 | 42,216 | 19,928 | |
Forfeitures | (4) | (7) | (13) | (9) | |
Ending balance, shares | 140,838 | 85,044 | 140,838 | 85,044 |
EQUITY (Summary of Company's Ca
EQUITY (Summary of Company's Cash Distribution Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Dec. 31, 2023 | |
EQUITY [Abstract] | ||||||||
Declared per Common Share (usd per share) | $ 0.15000 | $ 0.15000 | $ 0.15000 | $ 0.15000 | $ 0.13625 | $ 0.13625 | $ 0.30000 | $ 0.57250 |
Common Stock Distributions Paid in Cash | $ 16,430 | $ 16,820 | $ 16,483 | $ 16,825 | $ 15,490 | $ 15,284 | $ 33,250 | $ 64,082 |
Other Cash Distributions | 6,331 | 2,235 | 1,270 | 1,296 | 1,177 | 1,107 | 8,566 | 4,850 |
Reinvested in Shares | 22,114 | 22,484 | 22,196 | 22,550 | 20,357 | 20,653 | 44,598 | 85,756 |
Distribution Fees | 3,082 | 3,596 | 4,987 | 5,721 | 6,344 | 6,806 | 6,678 | 23,858 |
Gross Distributions | $ 47,957 | $ 45,135 | $ 44,936 | $ 46,392 | $ 43,368 | $ 43,850 | $ 93,092 | $ 178,546 |
EQUITY (Share Redemption Activi
EQUITY (Share Redemption Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
EQUITY [Abstract] | ||||
Number of shares redeemed (in shares) | 21,753 | 18,609 | ||
Aggregate dollar amount of shares redeemed | $ 176,320 | $ 145,951 | $ 279,172 | $ 280,939 |
Average redemption price per share (in dollars per share) | $ 12.83 | $ 15.10 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS (Redeemable Noncontrolling Interest Activity) (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jan. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Redeemable Noncontrolling Interest [Line Items] | |||||||
Beginning balance | $ 69,553 | $ 114,310 | $ 69,553 | $ 69,553 | |||
Settlement of prior year performance participation allocation | 62,667 | ||||||
Distributions to redeemable noncontrolling interests | $ (1,252) | $ (1,177) | (2,504) | (2,284) | |||
Redemptions of redeemable noncontrolling interests | (1,000) | ||||||
Net loss attributable to redeemable noncontrolling interests | (1,304) | (1,346) | (1,586) | (3,018) | |||
Change from cash flow hedging activities and available-for-sale securities attributable to redeemable noncontrolling interests | (37) | 576 | 487 | 59 | |||
Redemption value allocation adjustment to redeemable noncontrolling interests | (1,715) | (911) | |||||
Ending balance | $ 107,992 | $ 126,066 | $ 107,992 | $ 126,066 | $ 114,310 | $ 69,553 | |
Redeemable noncontrolling interests activity, in shares | |||||||
Beginning balance, shares | 4,532 | 8,346 | 4,532 | 4,532 | |||
Settlement of prior year performance participation allocation, shares | 4,106 | ||||||
Redemptions of redeemable noncontrolling interests, shares | (79) | ||||||
Ending balance, shares | 8,267 | 8,638 | 8,267 | 8,638 | 8,346 | 4,532 | |
Payable as of | $ 55,845 | $ 55,845 | $ 57,176 | ||||
Related Party | Ares Commercial Real Estate Management | |||||||
Redeemable noncontrolling interests activity, in shares | |||||||
Fees and expenses | 27,074 | $ 33,092 | 55,058 | $ 68,957 | |||
Payable as of | $ 11,296 | 11,296 | 11,687 | ||||
Related Party | Performance Participation Allocation. | Ares Commercial Real Estate Management | |||||||
Redeemable noncontrolling interests activity, in shares | |||||||
Fees and expenses | $ 0 | $ 0 | |||||
Issuance of OP Units (in shares) | 4,100 | ||||||
Allocation, to be settled in cash | $ 77,800 | ||||||
Related Party | Performance Participation Allocation. | Operating Partnership Units | Ares Commercial Real Estate Management | |||||||
Redeemable noncontrolling interests activity, in shares | |||||||
Fees and expenses | $ 0 | ||||||
Payable as of | $ 140,500 |
NONCONTROLLING INTERESTS (Sched
NONCONTROLLING INTERESTS (Schedule of Non Controlling Interest) (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2024 shares | |
Noncontrolling Interest [Line Items] | |
Issuance of units | 6,300 |
Operating Partnership Units | |
Noncontrolling Interest [Line Items] | |
Issuance of units | 33,792 |
Ending balance, shares | 33,792 |
NONCONTROLLING INTERESTS (Addit
NONCONTROLLING INTERESTS (Additional Details) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Noncontrolling Interest [Line Items] | ||||
Stock Redeemed or Called During Period, Value | $ 176,320 | $ 145,951 | $ 279,172 | $ 280,939 |
Aggregate amount of OP Units redeemed | 21,753,000 | 18,609,000 | ||
Issuance of units | 6,300,000 | |||
Operating Partnership Units | ||||
Noncontrolling Interest [Line Items] | ||||
Number of common stock issued per operating partnership unit | 1 | |||
Estimated maximum redemption value (unaudited) | $ 425,900 | $ 425,900 | ||
Aggregate amount of OP Units redeemed | 0 | |||
Issuance of units | 33,792,000 | |||
Non related party | Operating Partnership Units | ||||
Noncontrolling Interest [Line Items] | ||||
Issuance of units | 0 |
RELATED PARTY TRANSACTIONS (Sum
RELATED PARTY TRANSACTIONS (Summary of Fees and Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | |||||
Distribution fees payable to affiliates | $ 86,864 | $ 86,864 | $ 64,517 | ||
Other liabilities | (55,845) | (55,845) | (57,176) | ||
Other assets | 81,649 | 81,649 | 69,072 | ||
Related Party | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 27,074 | $ 33,092 | 55,058 | $ 68,957 | |
Other liabilities | (11,296) | (11,296) | (11,687) | ||
Amount reimbursed for services | 3,100 | 2,500 | 6,300 | 5,600 | |
Related Party | Selling Commissions And Dealer Manager | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 326 | 1,175 | 678 | 3,183 | |
Related Party | Ongoing Distribution Fees | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 3,896 | 6,344 | 7,642 | 13,150 | |
Distribution fees payable to affiliates | 86,900 | 86,900 | 64,500 | ||
Other liabilities | (1,252) | (1,252) | (1,549) | ||
Related Party | Advisory Fee, Fixed Component | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 16,495 | 18,965 | 33,502 | 38,219 | |
Other liabilities | (5,458) | (5,458) | (5,813) | ||
Related Party | Other Expense Reimbursements | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 3,369 | 2,601 | 6,657 | 5,940 | |
Other liabilities | (3,368) | (3,368) | (2,799) | ||
Related Party | Property Accounting Fee | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 899 | 856 | 1,742 | 1,680 | |
Other liabilities | (295) | (295) | |||
Other assets | 129 | ||||
Related Party | D S T Program Selling Commissions, Dealer Manager And Distribution Fees | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 1,131 | 1,564 | 2,549 | 3,002 | |
Other liabilities | (615) | (615) | (852) | ||
Related Party | Other D S T Program Related Costs | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 747 | 1,411 | 1,785 | 2,916 | |
Other liabilities | (145) | (145) | (215) | ||
Related Party | Development Fees | Ares Commercial Real Estate Management | |||||
Related Party Transaction [Line Items] | |||||
Fees and expenses | 211 | $ 176 | 503 | $ 867 | |
Other liabilities | $ (163) | $ (163) | $ (588) |
RELATED PARTY TRANSACTIONS (Per
RELATED PARTY TRANSACTIONS (Performance Participation Allocation) (Details) - Related Party - Ares Commercial Real Estate Management - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||||
Fees and expenses | $ 27,074 | $ 33,092 | $ 55,058 | $ 68,957 |
Performance Participation Allocation. | ||||
Related Party Transaction [Line Items] | ||||
Fees and expenses | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Joi
RELATED PARTY TRANSACTIONS (Joint Venture Partnerships) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
BTC II B Partnership | Related Party | BTC II B Partnership Agreement | BTC II B Partnership | ||||
Related Party Transaction [Line Items] | ||||
Fees and expenses | $ 0.4 | $ 0.7 | $ 0.7 | $ 1.3 |
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 | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
NET INCOME (LOSS) PER COMMON SHARE [Abstract] | ||||
Net loss attributable to common stockholders-basic | $ (43,370) | $ (48,257) | $ (53,048) | $ (113,069) |
Net loss attributable to redeemable noncontrolling interests | (1,304) | (1,346) | (1,586) | (3,018) |
Net (loss) income attributable to noncontrolling interests | (5,270) | 10 | (5,478) | 19 |
Net loss attributable to common stockholders-diluted | $ (49,944) | $ (49,593) | $ (60,112) | $ (116,068) |
Weighted-average shares outstanding-basic (in shares) | 277,521 | 309,616 | 281,755 | 311,543 |
Incremental weighted-average shares outstanding-diluted | 42,139 | 8,638 | 28,454 | 8,366 |
Weighted-average shares outstanding - diluted | 319,660 | 318,254 | 310,209 | 319,909 |
Net loss per share attributable to common stockholders-basic (in dollars per share) | $ (0.16) | $ (0.16) | $ (0.19) | $ (0.36) |
Net loss per share attributable to common stockholders- diluted (in dollars per share) | $ (0.16) | $ (0.16) | $ (0.19) | $ (0.36) |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Distributions reinvested in common stock | $ 44,675 | $ 41,093 |
Increase in DST Program Loans receivable through DST Program capital raising | 8,272 | 32,611 |
Issuances of OP Units for DST Interests | 436,174 | |
Redeemable noncontrolling interests issued as settlement of performance participation allocation | 62,667 | |
Increase (decrease) in accrued future ongoing distribution fees | 22,349 | (11,825) |
(Decrease) increase in accrued capital expenditures | (24,131) | (4,853) |
Non-cash selling commissions and dealer manager fees | $ 678 | $ 3,183 |
SUPPLEMENTAL CASH FLOW INFORM_4
SUPPLEMENTAL CASH FLOW INFORMATION (Restricted Cash) (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | ||||
Cash and cash equivalents | $ 31,431 | $ 14,322 | $ 52,525 | $ 79,524 |
Restricted cash | 3,091 | 620 | 488 | 499 |
Cash, cash equivalents and restricted cash | $ 34,522 | $ 14,942 | $ 53,013 | $ 80,023 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Aug. 02, 2024 | Jul. 01, 2024 USD ($) property shares | Jun. 30, 2024 USD ($) building | Jun. 30, 2024 USD ($) building shares | Jun. 30, 2023 USD ($) | Jul. 31, 2024 $ / shares shares | Dec. 31, 2023 USD ($) building | |
Subsequent Event [Line Items] | |||||||
Number of industrial properties | building | 250 | 250 | 256 | ||||
Proceeds from disposition of real estate properties | $ 207,822 | ||||||
Net investment in real estate properties | $ 6,643,148 | 6,643,148 | $ 6,753,978 | ||||
Issuances of OP Units for DST Interests | 307,321 | 436,174 | |||||
Financing obligations, net | 1,253,684 | 1,253,684 | 1,658,634 | ||||
Total DST Program Loans | $ 137,466 | $ 137,466 | $ 202,715 | ||||
Operating Partnership Units | D S T Program | |||||||
Subsequent Event [Line Items] | |||||||
Issuance of OP Units (in shares) | shares | 33,800,000 | ||||||
Issuances of OP Units for DST Interests | $ 436,200 | $ 0 | |||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Common Stock, Shares Authorized | shares | 1,025,000,000 | ||||||
Subsequent Event | Dealer Manager | |||||||
Subsequent Event [Line Items] | |||||||
Dealer manager agreement termination written notice period | 60 days | ||||||
Subsequent Event | Class T-R Common Share | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (usd per share) | $ / shares | $ 0.01 | ||||||
Subsequent Event | Class D-R Common Share | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (usd per share) | $ / shares | 0.01 | ||||||
Subsequent Event | Class I-R Common Share | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (usd per share) | $ / shares | 0.01 | ||||||
Subsequent Event | Class S-PR Common Shares | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (usd per share) | $ / shares | $ 0.01 | ||||||
Common Stock, Shares Authorized | shares | 425,000,000 | ||||||
Subsequent Event | Class D-PR Common Shares | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (usd per share) | $ / shares | $ 0.01 | ||||||
Common Stock, Shares Authorized | shares | 175,000,000 | ||||||
Subsequent Event | Class I-PR Common Shares | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (usd per share) | $ / shares | $ 0.01 | ||||||
Common Stock, Shares Authorized | shares | 425,000,000 | ||||||
Subsequent Event | Operating Partnership Units | D S T Program | |||||||
Subsequent Event [Line Items] | |||||||
Issuance of OP Units (in shares) | shares | 8.3 | ||||||
Issuances of OP Units for DST Interests | $ 104,700 | ||||||
Financing obligations, net | 117,500 | ||||||
Total DST Program Loans | $ 117,500 | ||||||
Subsequent Event | Industrial Property | Disposed by sale | |||||||
Subsequent Event [Line Items] | |||||||
Number of industrial properties | property | 2 | ||||||
Proceeds from disposition of real estate properties | $ 32,200 | ||||||
Net investment in real estate properties | $ 17,700 |