Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 25, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39443 | |
Entity Registrant Name | NETSTREIT Corp. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 84-3356606 | |
Entity Address, Address Line One | 2021 McKinney Avenue | |
Entity Address, Address Line Two | Suite 1150 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75201 | |
City Area Code | 972 | |
Local Phone Number | 200-7100 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | NTST | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 77,377,679 | |
Entity Central Index Key | 0001798100 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Real estate, at cost: | ||
Land | $ 494,654 | $ 460,896 |
Buildings and improvements | 1,270,572 | 1,149,809 |
Total real estate, at cost | 1,765,226 | 1,610,705 |
Less accumulated depreciation | (122,236) | (101,210) |
Property under development | 16,896 | 29,198 |
Real estate held for investment, net | 1,659,886 | 1,538,693 |
Assets held for sale | 68,096 | 52,451 |
Mortgage loans receivable, net | 129,941 | 114,472 |
Cash, cash equivalents and restricted cash | 13,726 | 29,929 |
Lease intangible assets, net | 162,273 | 161,354 |
Other assets, net | 64,064 | 49,337 |
Total assets | 2,097,986 | 1,946,236 |
Liabilities: | ||
Term loans, net | 621,869 | 521,912 |
Revolving credit facility | 98,000 | 80,000 |
Mortgage note payable, net | 7,869 | 7,883 |
Lease intangible liabilities, net | 23,876 | 25,353 |
Liabilities related to assets held for sale | 1,142 | 1,158 |
Accounts payable, accrued expenses and other liabilities | 27,368 | 36,498 |
Total liabilities | 780,124 | 672,804 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Common stock, $0.01 par value, 400,000,000 shares authorized; 77,377,679 and 73,207,080 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 773 | 732 |
Additional paid-in capital | 1,435,577 | 1,367,505 |
Distributions in excess of retained earnings | (143,734) | (112,276) |
Accumulated other comprehensive income | 17,600 | 8,943 |
Total stockholders’ equity | 1,310,216 | 1,264,904 |
Noncontrolling interests | 7,646 | 8,528 |
Total equity | 1,317,862 | 1,273,432 |
Total liabilities and equity | $ 2,097,986 | $ 1,946,236 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 77,377,679 | 73,207,080 |
Common stock, shares outstanding | 77,377,679 | 73,207,080 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues | ||||
Rental revenue (including reimbursable) | $ 36,864 | $ 29,707 | $ 72,053 | $ 58,180 |
Interest income on loans receivable | 2,703 | 1,923 | 5,187 | 2,901 |
Total revenues | 39,567 | 31,630 | 77,240 | 61,081 |
Operating expenses | ||||
Property | 3,982 | 3,530 | 8,084 | 7,467 |
General and administrative | 5,268 | 5,260 | 10,978 | 10,168 |
Depreciation and amortization | 18,544 | 15,847 | 36,084 | 30,795 |
Provisions for impairment | 3,836 | 2,836 | 7,498 | 2,836 |
Transaction costs | 47 | 15 | 175 | 124 |
Total operating expenses | 31,677 | 27,488 | 62,819 | 51,390 |
Other (expense) income | ||||
Interest expense, net | (7,604) | (5,521) | (13,784) | (9,465) |
Gain on sales of real estate, net | 8 | 615 | 1,006 | 296 |
Loss on debt extinguishment | 0 | (128) | 0 | (128) |
Total other (expense) income, net | (2,588) | 68 | (2,868) | 220 |
Total other (expense) income, net | (10,184) | (4,966) | (15,646) | (9,077) |
Net (loss) income before income taxes | (2,294) | (824) | (1,225) | 614 |
Income tax (expense) benefit | (12) | 32 | (29) | 75 |
Net (loss) income | (2,306) | (792) | (1,254) | 689 |
Net (loss) income attributable to noncontrolling interests | (15) | (1) | (8) | 8 |
Net (loss) income attributable to common stockholders | $ (2,291) | $ (791) | $ (1,246) | $ 681 |
Amounts available to common stockholders per common share: | ||||
Basic (in dollars per share) | $ (0.03) | $ (0.01) | $ (0.02) | $ 0.01 |
Diluted (in dollars per share) | $ (0.03) | $ (0.01) | $ (0.02) | $ 0.01 |
Weighted average common shares: | ||||
Basic (in shares) | 73,588,605 | 61,043,531 | 73,419,198 | 59,600,630 |
Diluted (in shares) | 73,588,605 | 61,043,531 | 73,419,198 | 60,294,734 |
Other comprehensive income: | ||||
Net (loss) income | $ (2,306) | $ (792) | $ (1,254) | $ 689 |
Change in value on derivatives, net | (420) | 6,388 | 8,708 | 409 |
Total comprehensive (loss) income | (2,726) | 5,596 | 7,454 | 1,098 |
Comprehensive (loss) income attributable to noncontrolling interests | (15) | 48 | 43 | 8 |
Comprehensive (loss) income attributable to common stockholders | $ (2,711) | $ 5,548 | $ 7,411 | $ 1,090 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | IPO | IPO - Shares From Existing Shareholders | Total Stockholders’ Equity | Total Stockholders’ Equity IPO | Total Stockholders’ Equity IPO - Shares From Existing Shareholders | Common stock | Common stock IPO | Common stock IPO - Shares From Existing Shareholders | Additional Paid-in Capital | Additional Paid-in Capital IPO | Additional Paid-in Capital IPO - Shares From Existing Shareholders | Distributions in Excess of Retained Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interests | Noncontrolling Interests IPO - Shares From Existing Shareholders |
Beginning balance (in shares) at Dec. 31, 2022 | 58,031,879 | |||||||||||||||
Beginning balance at Dec. 31, 2022 | $ 1,058,423 | $ 1,048,830 | $ 580 | $ 1,091,514 | $ (66,937) | $ 23,673 | $ 9,593 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of stock (in shares) | 2,759,481 | |||||||||||||||
Issuance of stock | 52,903 | 52,903 | $ 28 | 52,875 | ||||||||||||
OP Units converted to common stock (in shares) | 5,694 | |||||||||||||||
Issuance of common stock in public offerings, net of issuance costs | $ 0 | $ 105 | $ 105 | $ (105) | ||||||||||||
OP Units converted to common stock | (11,751) | (11,650) | (11,650) | (101) | ||||||||||||
Dividends and distributions declared on common stock and OP Units | (122) | (122) | (122) | |||||||||||||
Vesting of restricted stock units (in shares) | 83,428 | |||||||||||||||
Vesting of restricted stock units | 0 | $ 1 | (1) | |||||||||||||
Repurchase of common stock for tax withholding obligations (in shares) | (18,016) | |||||||||||||||
Repurchase of common stock for tax withholding obligations | (360) | (360) | (360) | |||||||||||||
Repurchase of common stock for tax withholding obligations | 1,027 | 1,027 | 1,027 | |||||||||||||
Other comprehensive income | (5,979) | (5,930) | (5,930) | (49) | ||||||||||||
Net income (loss) | 1,481 | 1,472 | 1,472 | 9 | ||||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 60,862,466 | |||||||||||||||
Ending balance at Mar. 31, 2023 | 1,095,622 | 1,086,275 | $ 609 | 1,145,160 | (77,237) | 17,743 | 9,347 | |||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 58,031,879 | |||||||||||||||
Beginning balance at Dec. 31, 2022 | 1,058,423 | 1,048,830 | $ 580 | 1,091,514 | (66,937) | 23,673 | 9,593 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
OP Units converted to common stock (in shares) | 5,694 | |||||||||||||||
Net income (loss) | 689 | |||||||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 66,991,597 | |||||||||||||||
Ending balance at Jun. 30, 2023 | 1,204,595 | 1,195,302 | $ 670 | 1,260,879 | (90,329) | 24,082 | 9,293 | |||||||||
Beginning balance (in shares) at Mar. 31, 2023 | 60,862,466 | |||||||||||||||
Beginning balance at Mar. 31, 2023 | 1,095,622 | 1,086,275 | $ 609 | 1,145,160 | (77,237) | 17,743 | 9,347 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of stock (in shares) | 6,128,135 | |||||||||||||||
Issuance of stock | $ 114,536 | $ 114,536 | $ 61 | $ 114,475 | ||||||||||||
OP Units converted to common stock | (12,275) | (12,173) | (12,173) | (102) | ||||||||||||
Dividends and distributions declared on common stock and OP Units | (128) | (128) | (128) | |||||||||||||
Vesting of restricted stock units (in shares) | 1,416 | |||||||||||||||
Repurchase of common stock for tax withholding obligations (in shares) | (420) | |||||||||||||||
Repurchase of common stock for tax withholding obligations | (8) | (8) | (8) | |||||||||||||
Repurchase of common stock for tax withholding obligations | 1,252 | 1,252 | 1,252 | |||||||||||||
Other comprehensive income | 6,388 | 6,339 | 6,339 | 49 | ||||||||||||
Net income (loss) | (792) | (791) | (791) | (1) | ||||||||||||
Ending balance (in shares) at Jun. 30, 2023 | 66,991,597 | |||||||||||||||
Ending balance at Jun. 30, 2023 | 1,204,595 | 1,195,302 | $ 670 | 1,260,879 | (90,329) | 24,082 | 9,293 | |||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 73,207,080 | |||||||||||||||
Beginning balance at Dec. 31, 2023 | 1,273,432 | 1,264,904 | $ 732 | 1,367,505 | (112,276) | 8,943 | 8,528 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
OP Units converted to common stock (in shares) | 7,119 | |||||||||||||||
Issuance of common stock in public offerings, net of issuance costs | $ 0 | 126 | 126 | (126) | ||||||||||||
OP Units converted to common stock | (15,129) | (15,031) | (15,031) | (98) | ||||||||||||
Dividends and distributions declared on common stock and OP Units | (143) | (143) | (143) | |||||||||||||
Vesting of restricted stock units (in shares) | 176,197 | |||||||||||||||
Vesting of restricted stock units | 0 | $ 2 | (2) | |||||||||||||
Repurchase of common stock for tax withholding obligations (in shares) | (61,985) | |||||||||||||||
Repurchase of common stock for tax withholding obligations | (1,069) | (1,069) | $ (1) | (1,068) | ||||||||||||
Repurchase of common stock for tax withholding obligations | 1,886 | 1,886 | 1,751 | 135 | ||||||||||||
Other comprehensive income | 9,128 | 9,077 | 9,077 | 51 | ||||||||||||
Net income (loss) | 1,052 | 1,045 | 1,045 | 7 | ||||||||||||
Ending balance (in shares) at Mar. 31, 2024 | 73,328,411 | |||||||||||||||
Ending balance at Mar. 31, 2024 | 1,269,157 | 1,260,795 | $ 733 | 1,368,312 | (126,270) | 18,020 | 8,362 | |||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 73,207,080 | |||||||||||||||
Beginning balance at Dec. 31, 2023 | 1,273,432 | 1,264,904 | $ 732 | 1,367,505 | (112,276) | 8,943 | 8,528 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
OP Units converted to common stock (in shares) | 42,240 | |||||||||||||||
Net income (loss) | (1,254) | |||||||||||||||
Ending balance (in shares) at Jun. 30, 2024 | 77,377,679 | |||||||||||||||
Ending balance at Jun. 30, 2024 | 1,317,862 | 1,310,216 | $ 773 | 1,435,577 | (143,734) | 17,600 | 7,646 | |||||||||
Beginning balance (in shares) at Mar. 31, 2024 | 73,328,411 | |||||||||||||||
Beginning balance at Mar. 31, 2024 | 1,269,157 | 1,260,795 | $ 733 | 1,368,312 | (126,270) | 18,020 | 8,362 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of stock (in shares) | 4,000,000 | |||||||||||||||
Issuance of stock | $ 65,324 | $ 65,324 | $ 40 | $ 65,284 | ||||||||||||
OP Units converted to common stock (in shares) | 35,121 | |||||||||||||||
Issuance of common stock in public offerings, net of issuance costs | $ 0 | $ 611 | $ 611 | $ (611) | ||||||||||||
OP Units converted to common stock | (15,132) | (15,042) | (15,042) | (90) | ||||||||||||
Dividends and distributions declared on common stock and OP Units | (139) | (139) | (139) | |||||||||||||
Vesting of restricted stock units (in shares) | 23,510 | |||||||||||||||
Repurchase of common stock for tax withholding obligations (in shares) | (9,363) | |||||||||||||||
Repurchase of common stock for tax withholding obligations | (160) | (160) | (160) | |||||||||||||
Repurchase of common stock for tax withholding obligations | 1,538 | 1,538 | 1,530 | 8 | ||||||||||||
Other comprehensive income | (420) | (420) | (420) | |||||||||||||
Net income (loss) | (2,306) | (2,291) | (2,291) | (15) | ||||||||||||
Ending balance (in shares) at Jun. 30, 2024 | 77,377,679 | |||||||||||||||
Ending balance at Jun. 30, 2024 | $ 1,317,862 | $ 1,310,216 | $ 773 | $ 1,435,577 | $ (143,734) | $ 17,600 | $ 7,646 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net (loss) income | $ (1,254) | $ 689 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 36,084 | 30,795 |
Amortization of deferred financing costs | 1,115 | 615 |
Above/below market lease amortization, net | 57 | 57 |
Noncash revenue adjustments | (1,227) | (839) |
Amortization of deferred gains on interest rate swaps | (1,958) | 0 |
Stock-based compensation expense | 3,281 | 2,279 |
Gain on sales of real estate, net | (1,006) | (296) |
Provisions for impairment | 7,498 | 2,836 |
Loss on debt extinguishment | 0 | 128 |
Loss (gain) on involuntary conversion of building and improvements | 905 | (47) |
Changes in assets and liabilities, net of assets acquired and liabilities assumed: | ||
Other assets, net | (4,285) | (2,227) |
Accounts payable, accrued expenses and other liabilities | (2,192) | 1,628 |
Lease incentive payments | 0 | (1,223) |
Net cash provided by operating activities | 37,018 | 34,395 |
Cash flows from investing activities | ||
Acquisitions of real estate | (190,764) | (163,934) |
Real estate development and improvements | (29,996) | (19,426) |
Investment in mortgage loans receivable | (18,021) | (61,422) |
Principal collections on mortgage loans receivable | 2,338 | 0 |
Earnest money deposits | (14) | (1,066) |
Purchase of computer equipment and other corporate assets | (8) | (23) |
Proceeds from sale of real estate | 32,542 | 19,299 |
Proceeds from the settlement of property-related insurance claims | 0 | 47 |
Net cash used in investing activities | (203,923) | (226,525) |
Cash flows from financing activities | ||
Issuance of common stock in public offerings, net | 65,324 | 167,439 |
Payment of common stock dividends | (30,073) | (23,823) |
Payment of OP unit distributions | (188) | (203) |
Payment of restricted stock dividends | (441) | (93) |
Principal payments on mortgages payable | (77) | (63) |
Proceeds under revolving credit facilities | 190,000 | 221,000 |
Repayments under revolving credit facilities | (172,000) | (228,000) |
Proceeds from term loans | 100,000 | 0 |
Repurchase of common stock for tax withholding obligations | (1,229) | (368) |
Deferred offering costs | (614) | (185) |
Deferred financing costs | 0 | (977) |
Net cash provided by financing activities | 150,702 | 134,727 |
Net change in cash, cash equivalents and restricted cash | (16,203) | (57,403) |
Cash, cash equivalents and restricted cash at beginning of the period | 29,929 | 70,543 |
Cash, cash equivalents and restricted cash at end of the period | 13,726 | 13,140 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest, net | 13,437 | 8,045 |
Cash (received) paid for income taxes | (8) | 477 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Dividends declared and unpaid on restricted stock | 139 | 250 |
Deferred offering costs included in accounts payable, accrued expenses and other liabilities | 22 | 121 |
Accrued loan origination fees on mortgage loans receivable | 200 | 0 |
Cash flow hedge change in fair value | 10,666 | 409 |
Accrued capital expenditures and real estate development and improvement costs | $ 2,657 | $ 3,858 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business NETSTREIT Corp. (the “Company”) was incorporated on October 11, 2019 as a Maryland corporation and commenced operations on December 23, 2019. The Company conducts its operations through NETSTREIT, L.P., a Delaware limited partnership (the “Operating Partnership”). NETSTREIT GP, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company, is the sole general partner of the Operating Partnership. The Company elected to be treated and to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with its short taxable year ended December 31, 2019. Additionally, the Operating Partnership formed NETSTREIT Management TRS, LLC (“NETSTREIT TRS”), which together with the Company jointly elected to be treated as a taxable REIT subsidiary under Section 856(a) of the Internal Revenue Code of 1986, as amended, (the “Code”) for U.S. federal income tax purposes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying condensed consolidated financial statements include the accounts of the Company and subsidiaries in which the Company has a controlling financial interest. All intercompany accounts and transactions have been eliminated in consolidation and the Company’s net (loss) income is reduced by the portion of net (loss) income attributable to noncontrolling interests. Interim Unaudited Financial Information The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. These unaudited interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto on the Annual Report on Form 10-K as of and for the year ended December 31, 2023, which provide a more complete understanding of the Company’s accounting policies, financial position, operating results, business properties, and other matters. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2024 and 2023 are not necessarily indicative of the results for the full year. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant assumptions and estimates relate to the useful lives of real estate assets, lease accounting, real estate impairment assessments, and allocation of fair value of purchase consideration. These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances. The Company evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates. Impairment of Long-Lived Assets Fair value measurement of an asset group occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. An example of an event or changed circumstance is a reduction in the expected holding period of a property. If indicators are present, the Company will prepare a projection of the undiscounted future cash flows of the property, excluding interest charges, and determine if the carrying amount of the asset group is recoverable. When a carrying amount is not recoverable, an impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair market value. The Company estimates fair value using data such as operating income, estimated capitalization rates or multiples, leasing prospects, local market information, and discount rates, and with regard to assets held for sale, based on the estimated or negotiated selling price, less estimated costs of disposal. Based on these unobservable inputs, the Company determined that its valuations of impaired real estate and intangible assets fall within Level 2 and Level 3 of the fair value hierarchy under ASC Topic 820. The following table summarizes the provision for impairment during the periods indicated below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Total provision for impairment $ 3,836 $ 2,836 $ 7,498 $ 2,836 Number of properties: (1) Classified as held for sale 5 6 5 6 Disposed within the period 1 — 7 — (1) Includes the number of properties that were either (i) impaired during the period on the held for sale classification date and remained as held for sale as of period-end or (ii) impaired and disposed of during the respective period. Excludes properties that did not have impairment recorded during the period. Of the total provision for impairment during the three months ended June 30, 2024, the Company recorded $1.1 million of additional impairment expense on four properties that were classified as held for sale in prior periods, and $1.9 million of impairment expense on two properties held for investment. Of the total provision for impairment during the six months ended June 30, 2024, the Company recorded $1.4 million of additional impairment expense on five properties that were classified as held for sale in prior periods and $4.1 million of impairment expense on six properties held for investment. Cash, Cash Equivalents and Restricted Cash The Company considers all cash balances, money market accounts and highly liquid investments with original maturities of three months or less to be cash and cash equivalents. Restricted cash includes cash restricted for property tenant improvements and cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the Code. Restricted cash is included in cash, cash equivalents, and restricted cash in the condensed consolidated balance sheets. The Company had $0.5 million of restricted cash as of June 30, 2024, and $11.5 million of restricted cash as of December 31, 2023. The Company’s bank balances as of June 30, 2024 and December 31, 2023 included certain amounts over the Federal Deposit Insurance Corporation limits. Fair Value Measurement Fair value measurements are utilized in the accounting of the Company’s assets acquired and liabilities assumed in an asset acquisition and also affect the Company’s accounting for certain of its financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 inputs, such as quoted prices in an active market; Level 2 inputs, which are observable inputs for similar assets; or Level 3 inputs, which are unobservable inputs. The Company uses the following inputs in its fair value measurements: – Level 2 and Level 3 inputs for its debt and derivative financial instrument fair value disclosures. See “Note 6 - Debt” and “Note 7 - Derivative Financial Instruments,” respectively; and – Level 2 and Level 3 inputs when assessing the fair value of assets and liabilities in connection with real estate acquisitions and impairment. See “Note 4 - Real Estate Investments.” Additionally, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based on market conditions and perceived risks as of June 30, 2024 and December 31, 2023. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The fair value of the Company’s cash, cash equivalents and restricted cash (including money market accounts), other assets and accounts payable, accrued expenses and other liabilities approximate their carrying value because of the short-term nature of these instruments. Additionally, the Company believes the following financial instruments have carrying values that approximate their fair values as of June 30, 2024: • Borrowings under the Company’s Revolver (as defined in “Note 6 - Debt”) approximate fair value based on their nature, terms and variable interest rates. • Carrying values of the Company’s mortgage loans receivable approximate fair values based on a number of factors, including either their short-term nature, the availability of market quotes for comparable instruments, and a discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates, and credit spreads. • Carrying value of the Company’s mortgage note payable approximates fair value based on a discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates, and credit spreads. Provisions for impairment recognized during the three and six months ended June 30, 2024 partially related to assets held for sale where impairment was determined based on the estimated or negotiated selling price, less costs of disposal, compared to the carrying value of the property. The Company also recorded $1.9 million and $4.1 million of impairment expense on two and six properties held for investment, respectively, during the three and six months ended June 30, 2024. These properties were accounted for at fair value on a nonrecurring basis using a cash flow model (Level 3 inputs) with adjusted carrying values ranging from $0.2 million to $4.8 million. The Company estimated the fair value using a capitalization rates ranging from 7.6% to 12.1% which it believes is reasonable based on current market rates. As of December 31, 2023, there were two real estate assets held for investment accounted for at fair value. Of these properties, one was accounted for at fair value on a nonrecurring basis using a cash flow model (Level 3 inputs) with an adjusted carrying value of $1.5 million. The following table discloses estimated fair value information for the Company’s 2027 Term Loan, 2028 Term Loan, and 2029 Term Loan (each as defined in “Note 6 - Debt”) which is derived based primarily on unobservable market inputs such as interest rates and discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates and credit spreads (in thousands): June 30, 2024 December 31, 2023 Carrying Value (1) Estimated Fair Value Carrying Value (1) Estimated Fair Value 2027 Term Loan $ 174,273 $ 175,493 $ 174,037 $ 175,641 2028 Term Loan 199,126 201,242 199,006 201,396 2029 Term Loan 248,471 250,909 148,869 150,666 (1) The carrying value of the debt instruments are net of unamortized debt issuance and discount costs. Concentrations of Credit Risk During the three months ended June 30, 2024, one tenant, Dollar General, accounted for 11.3% of total revenues. During the three months ended June 30, 2023, there were no other tenants or borrowers with rental or interest income on loans receivable that exceeded 10% of total revenues. During the six months ended June 30, 2024, one tenant, Dollar General, accounted for 11.5% of total revenues. During the six months ended June 30, 2023, there were no other tenants or borrowers with rental or interest income on loans receivable that exceeded 10% of total revenues. Other financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash held at various financial institutions, access to the Company’s credit facilities, and amounts due or payable under derivative contracts. These credit risk exposures are spread among a diversified group of investment grade financial institutions. Segment Reporting ASC Topic 280, Segment Reporting, establishes standards for the manner in which companies report information about operating segments. Substantially all of the Company’s investments, at acquisition, are comprised of real estate owned that is leased to tenants on a long-term basis or real estate that secures the Company's investment in mortgage loans receivable. The Company allocates resources and assesses operating performance based on individual investment and property needs. Therefore, the Company aggregates these investments for reporting purposes and operates in one reportable segment. Recent Accounting Pronouncements Issued But Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosures by requiring disclosure of incremental segment information on an annual and interim basis such as, annual and interim disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, interim disclosure of a reportable segment’s profit or loss and assets, and the requirement that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280. The amendments in ASU 2023-07 do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The disclosures are applied retrospectively to all periods presented and early adoption is permitted. The Company has one reportable segment and continues to evaluate additional disclosures that may be required for entities with a single reportable segment. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company acquires, owns and manages commercial single-tenant lease properties, with the majority being long-term triple-net leases where the tenant is generally responsible for all improvements and contractually obligated to pay all operating costs (such as real estate taxes, utilities and repairs and maintenance costs). As of June 30, 2024, exclusive of mortgage loans receivable, the Company’s weighted average remaining lease term was 9.5 years. The Company’s property leases have been classified as operating leases and some have scheduled rent increases throughout the lease term. The Company’s leases typically provide the tenant one or more multi-year renewal options to extend their leases, subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term. All lease-related income is reported as a single line item, rental revenue (including reimbursable), in the condensed consolidated statements of operations and comprehensive (loss) income and is presented net of any reserves, write-offs, or recoveries for uncollectible amounts. Fixed lease income includes stated amounts per the lease contract, which include base rent, fixed common area maintenance charges, and straight-line lease adjustments. Variable lease income primarily includes recoveries from tenants, which represent amounts that tenants are contractually obligated to reimburse the Company for, specific to their portion of actual recoverable costs incurred. Variable lease income also includes percentage rent, which represents amounts billable to tenants based on their actual sales volume in excess of levels specified in the lease contract. The following table provides a disaggregation of lease income recognized under ASC 842 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Rental revenue Fixed lease income (1) $ 33,788 $ 26,808 $ 65,653 $ 51,531 Variable lease income (2) 2,978 2,715 6,207 6,252 Other rental revenue: Above/below market lease amortization, net 287 377 573 789 Lease incentives (189) (193) (380) (392) Rental revenue (including reimbursable) $ 36,864 $ 29,707 $ 72,053 $ 58,180 (1) Fixed lease income includes contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term. (2) Variable lease income primarily includes tenant reimbursements for real estate taxes, insurance, common area maintenance, and lease termination fees, and reserves for uncollectible amounts. There were no material reserves, write-offs, or recoveries of uncollectible amounts during the three and six months ended June 30, 2024 and 2023. Scheduled future minimum base rental payments (excluding base rental payments from properties classified as held for sale and straight line rent adjustments for all properties) due to be received under the remaining non-cancelable term of the operating leases in place as of June 30, 2024 are as follows (in thousands): Future Minimum Base Remainder of 2024 $ 66,247 2025 132,701 2026 130,639 2027 127,206 2028 120,591 Thereafter 736,410 Total $ 1,313,794 |
Real Estate Investments
Real Estate Investments | 6 Months Ended |
Jun. 30, 2024 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments As of June 30, 2024, the Company owned or had investments in 649 properties, excluding 12 property developments where rent has yet to commence. The gross real estate investment portfolio, including properties under development, totaled approximately $2.0 billion and consisted of the gross acquisition cost of land, buildings, improvements, lease intangible assets and liabilities, and property development costs. The investment portfolio is geographically dispersed throughout 45 states with gross real estate investments in Texas and Illinois representing 10.6% and 9.0%, respectively, of the total gross real estate investment of the Company’s investment portfolio. Acquisitions During the three months ended June 30, 2024, the Company acquired 18 properties for a total purchase price of $95.6 million, inclusive of $0.6 million of capitalized acquisition costs. During the six months ended June 30, 2024, the Company acquired 46 properties for a total purchase price of $190.8 million, inclusive of $1.8 million of capitalized acquisition costs. During the three months ended June 30, 2023, the Company acquired 28 properties for a total purchase price of $96.2 million, inclusive of $1.0 million of capitalized acquisition costs. During the six months ended June 30, 2023, the Company acquired 48 properties for a total purchase price of $163.9 million, inclusive of $1.7 million of capitalized acquisition costs. The acquisitions were all accounted for as asset acquisitions. An allocation of the purchase price and acquisition costs paid for the completed acquisitions is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Land $ 28,264 $ 19,748 $ 44,872 $ 34,052 Buildings 55,508 56,869 114,887 100,002 Site improvements 7,001 5,490 13,429 8,969 Tenant improvements 359 1,168 1,804 1,559 In-place lease intangible assets 4,479 11,399 15,772 17,809 Above-market lease intangible assets — 1,543 — 1,543 Purchase price (including acquisition costs) $ 95,611 $ 96,217 $ 190,764 $ 163,934 Development As of June 30, 2024, the Company had eight property developments under construction. During the three months ended June 30, 2024, the Company invested $12.0 million in property developments, including the land acquisition of two new developments with a combined initial purchase price of $1.2 million. During the six months ended June 30, 2024, the Company invested $23.0 million in property developments, including the land acquisition of four new developments with a combined initial purchase price of $2.0 million. During the six months ended June 30, 2024, the Company completed development on 14 projects and reclassified approximately $35.3 million from property under development to land, buildings and improvements, and other assets (leasing commissions) in the accompanying condensed consolidated balance sheets. Rent commenced for 10 of the completed developments during the six months ended June 30, 2024, while rent is expected to commence for the other four completed developments in the third quarter of 2024. The remaining eight developments are expected to be substantially completed with rent commencing at various points throughout 2024. The purchase price, including acquisition costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of June 30, 2024. During the three months ended June 30, 2023, the Company invested $17.7 million in property developments. During the six months ended June 30, 2023, the Company invested $22.2 million in property developments, including the land acquisition of 20 new developments with an initial purchase price of $11.9 million. During the six months ended June 30, 2023, the Company completed development on two projects and reclassified approximately $14.8 million from property under development to land, buildings and improvements in the accompanying condensed consolidated balance sheets. Rent commenced for the completed developments in the first quarter of 2023. The purchase price, including acquisitions costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of June 30, 2023. Additionally, during the three months ended June 30, 2024 and 2023, the Company capitalized approximately $0.2 million and $0.1 million, respectively, of interest expense associated with properties under development. During the six months ended June 30, 2024 and 2023, the Company capitalized approximately $0.6 million and $0.3 million, respectively, of interest expense associated with properties under development. Dispositions During the three months ended June 30, 2024, the Company sold six properties for a total sales price, net of disposal costs, of $12.1 million, recognizing a net gain of less than $0.1 million. During the three months ended June 30, 2023, the Company sold two properties for a total sales price, net of disposal costs, of $3.8 million, recognizing a net gain of $0.6 million. During the six months ended June 30, 2024, the Company sold 18 properties for a total sales price, net of disposal costs, of $32.5 million, recognizing a net gain of $1.0 million. During the six months ended June 30, 2023, the Company sold 10 properties for a total sales price, net of disposal costs, of $19.3 million, recognizing a net gain of $0.3 million. Investment in Mortgage Loans Receivable The Company’s mortgage loans receivable portfolio as of June 30, 2024 and December 31, 2023 is summarized below (in thousands): Loan Type Monthly Payment (1) Number of Secured Properties Effective Interest Rate (2) Stated Interest Rate Maturity Date June 30, 2024 December 31, 2023 Mortgage (3) (4) I/O 1 7.60% 7.50% 1/8/2025 $ 43,612 $ 43,612 Mortgage (4) I/O 46 9.55% 9.55% 3/10/2026 41,940 41,940 Mortgage (4) (5) I/O 3 8.11% 6.89% 4/10/2026 4,132 4,132 Mortgage (3) (4) (5) I/O 9 7.59% 7.59% 6/10/2025 14,024 14,024 Mortgage None (6) 1 7.73% 8.50% 12/29/2024 660 660 Mortgage (3) P+I 1 9.32% 7.50% 1/8/2025 3,231 3,246 Mortgage (3) (4) (7) I/O 12 8.80% 10.25% 6/18/2025 16,823 5,007 Mortgage (3) (4) I/O 2 14.10% 10.25% 12/22/2024 4,149 1,909 Mortgage (3) (4) I/O 1 10.25% 10.25% 4/26/2025 819 — Mortgage (3) (4) I/O 1 10.25% 10.25% 5/15/2025 784 — Total 130,174 114,530 Unamortized loan origination costs and fees, net 20 58 Unamortized discount (252) (116) Total mortgage loans receivable, net $ 129,941 $ 114,472 (1) I/O: Interest Only; P+I: Principal and Interest. (2) Includes amortization of discount, loan origination costs and fees, as applicable. (3) The Company has the right, subject to certain terms and conditions, to acquire all or a portion of the underlying collateralized properties. (4) Loans require monthly payments of interest only with principal payments occurring as borrower disposes of underlying properties, limited to the Company’s allocated investment by property. Any remaining principal balance will be repaid at or before the maturity date. (5) The stated interest rate is variable up to 15.0% and is calculated based on contractual rent for existing collateralized properties subject to the loan agreement. (6) Payments of both interest and principal are due at maturity. (7) The collateralized properties are in process developments with varying maturity dates dependent upon initial funding. Maturity dates range from December 5, 2024 to June 18, 2025. Assets Held for Sale As of June 30, 2024 and December 31, 2023, there were 25 and 23 properties, respectively, classified as held for sale. Provisions for Impairment The Company recorded provisions for impairment of $3.8 million and $2.8 million on 12 properties and six properties for the three months ended June 30, 2024 and 2023, respectively. |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Liabilities | Intangible Assets and Liabilities Intangible assets and liabilities consisted of the following (in thousands): June 30, 2024 December 31, 2023 Gross Accumulated Amortization Net Carrying Amount Gross Accumulated Amortization Net Carrying Amount Assets: In-place leases $ 191,928 $ (53,058) $ 138,870 $ 181,564 $ (45,210) $ 136,354 Above-market leases 21,634 (5,163) 16,471 21,661 (4,361) 17,300 Lease incentives 8,541 (1,609) 6,932 8,996 (1,296) 7,700 Total intangible assets $ 222,103 $ (59,830) $ 162,273 $ 212,221 $ (50,867) $ 161,354 Liabilities: Below-market leases $ 33,062 $ (9,186) $ 23,876 $ 33,196 $ (7,843) $ 25,353 The remaining weighted average amortization period for the Company’s intangible assets and liabilities as of June 30, 2024 and as of December 31, 2023 by category were as follows: Years Remaining June 30, 2024 December 31, 2023 In-place leases 8.9 8.8 Above-market leases 11.8 12.2 Below-market leases 10.5 10.9 Lease incentives 10.5 11.1 The Company records amortization of in-place lease assets to amortization expense, and records net amortization of above-market and below-market lease intangibles as well as amortization of lease incentives to rental revenue. The following amounts in the accompanying condensed consolidated statements of operations and comprehensive (loss) income related to the amortization of intangible assets and liabilities for all property and ground leases (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Amortization: Amortization of in-place leases $ 5,196 $ 4,809 $ 10,071 $ 9,479 Net adjustment to rental revenue: Above-market lease assets (93) (391) (188) (762) Below-market lease liabilities 380 768 761 1,551 Lease incentives (189) (193) (380) (392) $ 98 $ 184 $ 193 $ 397 The following table provides the projected amortization of in-place lease assets to amortization expense and the net amortization of above-market, below-market, and lease incentive lease intangible assets and liabilities to rental revenue as of June 30, 2024, for the next five years and thereafter (in thousands): Remainder of 2024 2025 2026 2027 2028 Thereafter Total In-place leases $ 10,388 $ 20,525 $ 19,319 $ 17,352 $ 14,548 $ 56,738 $ 138,870 Above-market lease assets $ (828) $ (1,655) $ (1,632) $ (1,568) $ (1,523) $ (9,265) $ (16,471) Below-market lease liabilities 1,394 2,771 2,681 2,610 2,478 11,942 23,876 Lease incentives (375) (751) (751) (695) (665) (3,695) (6,932) Net adjustment to rental revenue $ 191 $ 365 $ 298 $ 347 $ 290 $ (1,018) $ 473 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following (in thousands): Amounts Outstanding as of Contractual Fully Extended Maturity Date (1) Interest Rate (2) June 30, 2024 December 31, 2023 Debt: 2027 Term Loan (3) January 15, 2026 January 15, 2027 3.12% $ 175,000 $ 175,000 2028 Term Loan (4) February 11, 2028 — 3.88% 200,000 200,000 2029 Term Loan (5) July 3, 2026 January 3, 2029 4.99% 250,000 150,000 Revolver (6) August 11, 2026 August 11, 2027 6.43% 98,000 80,000 Mortgage Note November 1, 2027 — 4.53% 8,284 8,361 Total debt 731,284 613,361 Unamortized discount and debt issuance costs (3,546) (3,566) Unamortized deferred financing costs, net (7) (1,571) (1,942) Total debt, net $ 726,167 $ 607,853 (1) Date represents the fully extended maturity date available to the Company, subject to certain conditions, under each related debt instrument. ( 2 ) Rate represents the effective interest rate as of June 30, 2024 and includes the effect of interest rate swap agreements, as described further in “Note 6 - Debt” and “Note 7 - Derivative Financial Instruments.” (3) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.15% as of June 30, 2024. The Company has entered into five interest rate swap agreements that effectively convert the floating rate to a fixed rate. The hedged fixed rate reset effective November 27, 2023 to 1.87% and will reset again effective December 23, 2024 to 2.40%. (4) Loan is a floating-rate loan which resets monthly at one-month term SOFR plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.15% as of June 30, 2024. The Company has entered into three interest rate swap agreements that effectively convert the floating rate to a fixed rate. (5) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.15% as of June 30, 2024. The Company has entered into four interest rate swap agreements that effectively convert the floating rate to a fixed rate. (6) The annual interest rate of the Revolver assumes daily SOFR as of June 30, 2024 of 5.34% plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.00% as of June 30, 2024. (7) The Company records deferred financing costs associated with the Revolver in other assets, net on its condensed consolidated balance sheets. The Company reclassed the net amount of loan commitment fees associated with the 2029 Term Loan from other assets, net to debt issuance costs upon the $100.0 million draw under the 2029 Term Loan. 2029 Term Loan On July 3, 2023, the Company entered into an agreement (the “2029 Term Loan Agreement”) related to a $250.0 million sustainability-linked senior unsecured term loan (the “2029 Term Loan”) which may, subject to the terms of the 2029 Term Loan Agreement, be increased to an amount of up to $400.0 million at the Company’s request. The 2029 Term Loan contains a 12-month delayed draw feature and $150.0 million was drawn on July 3, 2023. The 2029 Term Loan is prepayable at the Company’s option in whole or in part without premium or penalty. The 2029 Term Loan matures on July 3, 2026, subject to two one-year extension options and one six-month extension option with a final, extended maturity date of January 3, 2029. The extension options are at the Company’s election and are subject to certain conditions. Subject to the terms of the 2029 Term Loan Agreement, the Company drew an additional $100.0 million under the 2029 Term Loan on March 1, 2024. The interest rate applicable to the 2029 Term Loan is determined by the Company’s Investment Grade Rating (as defined in the 2029 Term Loan Agreement). Prior to the date the Company obtains an Investment Grade Rating, interest shall accrue at either (i) SOFR, plus a margin ranging from 1.15% to 1.60% or (ii) Base Rate (as defined in the 2029 Term Loan Agreement), plus a margin ranging from 0.15% to 0.60%, in each case based on the Company’s consolidated total leverage ratio. After the date the Company obtains an Investment Grade Rating, interest shall accrue at either (i) SOFR, plus a margin ranging from 0.80% to 1.60% or (ii) Base Rate, plus a margin ranging from 0.00% to 0.60%, in each case based on the Company’s Investment Grade Rating. The Company has hedged the entire $250.0 million of the 2029 Term Loan at an all-in fixed interest rate of 4.99%, through January 2029, which consists of a fixed SOFR rate of 3.74%, plus a credit spread adjustment of 0.10% and, at current leverage levels, a borrowing spread of 1.15%. Interest is payable monthly or at the end of the applicable interest period in arrears on any outstanding borrowings. The 2029 Term Loan also contains sustainability-linked pricing component pursuant to which the Company will receive interest rate reductions up to 0.025% based on its performance against a sustainability performance target focused on the portion of the Company’s annualized based rent attributable to tenants with commitments or quantifiable targets for reduced GHG emission in accordance with the standards of the Science Based Targets initiative (“SBTi”). In connection with the 2029 Term Loan, the Company incurred $1.4 million of deferred financing costs. Additionally, the Company incurred $0.9 million of loan commitment fees associated with the 2029 Term Loan, which were capitalized to other assets, net on the condensed consolidated balance sheets and subsequently reclassed to debt issuance costs upon the $100.0 million draw under the 2029 Term Loan. Deferred financing costs are amortized over the term of the loan and are included in interest expense, net on the Company’s condensed consolidated statements of operations and comprehensive (loss) income. Credit Facility On August 11, 2022, the Company entered into a sustainability-linked senior unsecured credit facility consisting of (i) a $200.0 million senior unsecured term loan (the “2028 Term Loan”) and (ii) a $400.0 million senior unsecured revolving credit facility (the “Revolver”, and together with the 2028 Term Loan, the “Credit Facility”). The Credit Facility may be increased by $400.0 million in the aggregate for total availability of up to $1.0 billion. The 2028 Term Loan matures on February 11, 2028. The Revolver matures on August 11, 2026, subject to a one year extension option at the Company’s election (subject to certain conditions) to August 11, 2027. Borrowings under the Credit Facility are repayable at the Company’s option in whole or in part without premium or penalty. Borrowings under the Revolver may be repaid and reborrowed from time to time prior to the maturity date. Prior to the date the Company obtains an Investment Grade Rating (as defined in the credit agreement governing the Credit Facility (the “Credit Agreement”)), interest rates are based on the Company’s consolidated total leverage ratio, and are determined by (A) in the case of the 2028 Term Loan either (i) SOFR, plus a SOFR adjustment of 0.10%, plus a margin ranging from 1.15% to 1.60%, based on the Company’s consolidated total leverage ratio, or (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.15% to 0.60%, based on the Company’s consolidated total leverage ratio and (B) in the case of the Revolver either (i) SOFR, plus a SOFR adjustment of 0.10%, plus a margin ranging from 1.00% to 1.45%, based on the Company’s consolidated total leverage ratio, or (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.00% to 0.45%, based on the Company’s consolidated total leverage ratio. After the date the Company obtains an Investment Grade Rating, interest rates are based on the Company’s Investment Grade Rating, and are determined by (A) in the case of the 2028 Term Loan either (i) SOFR, plus a SOFR adjustment of 0.10%, plus a margin ranging from 0.80% to 1.60%, based on the Company’s Investment Grade Rating, or (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.00% to 0.60%, based on the Company’s Investment Grade Rating and (B) in the case of the Revolver either (i) SOFR, plus a SOFR adjustment of 0.10%, plus a margin ranging from 0.725% to 1.40%, based on the Company’s Investment Grade Rating, or (ii) a Base Rate (as defined in the Credit Agreement), plus a margin ranging from 0.00% to 0.40%, based on the Company’s Investment Grade Rating. Additionally, the Company will incur a facility fee based on the total commitment amount of $400.0 million under the Revolver. Prior to the date the Company obtains an Investment Grade Rating, the applicable facility fee will range from 0.15% to 0.30% based on the Company’s consolidated total leverage ratio. After the date the Company obtains an Investment Grade Rating, the applicable facility fee will range from 0.125% to 0.30% based on the Company’s Investment Grade Rating. The Credit Facility also contains a sustainability-linked pricing component pursuant to which the Company will receive interest rate reductions up to 0.025% based on its performance against a sustainability performance target focused on the portion of the Company’s annualized base rent attributable to tenants with commitments or quantifiable targets for reduced greenhouse gas emission in accordance with the standards of the SBTi. The Company has fully hedged the 2028 Term Loan with an all-in interest rate of 3.88%. Interest is payable monthly or at the end of the applicable interest period in arrears on any outstanding borrowings. The interest rate hedge is further described in “Note 7 – Derivative Financial Instruments.” In connection with the Credit Facility, the Company incurred approximately $3.8 million of deferred financing costs which were allocated between the Revolver and 2028 Term Loan in the amounts of $2.4 million and $1.3 million, respectively. Additionally, $0.5 million of unamortized deferred financing costs associated with the Company’s previous revolving credit facility were reclassed to the Revolver. Deferred financing costs are amortized over the remaining terms of each respective borrowing and are included in interest expense, net in the Company’s condensed consolidated statements of operations and comprehensive (loss) income. 2027 Term Loan In December 2019, the Company entered into an agreement governing a $175.0 million senior unsecured term loan that was scheduled to mature in December 2024 (the “2024 Term Loan”). On June 15, 2023, the Company amended and restated the agreement governing the 2024 Term Loan to provide for a $175.0 million senior unsecured term loan with a maturity date of January 15, 2026 that is subject to a one year extension option at the Company’s election (subject to certain conditions) (the “2027 Term Loan”). The 2027 Term Loan is repayable at the Company’s option in whole or in part without premium or penalty. The interest rate applicable to the 2027 Term Loan is determined by the Company’s Investment Grade Rating (as defined in the 2027 Term Loan). Prior to the date the Company obtains an Investment Grade Rating, interest shall accrue at either (i) SOFR, plus a margin ranging from 1.15% to 1.60% or (ii) Base Rate (as defined in the 2027 Term Loan), plus a margin ranging from 0.15% to 0.60%, in each case based on the Company’s consolidated total leverage ratio. After the date the Company obtains an Investment Grade Rating, interest shall accrue at either (i) SOFR, plus a margin ranging from 0.80% to 1.60% or (ii) Base Rate, plus a margin ranging from 0.00% to 0.60%, in each case based on the Company’s Investment Grade Rating. Interest is payable monthly or at the end of the applicable interest period in arrears. The Company has fully hedged the 2027 Term Loan. The interest rate hedges are described in “Note 7 – Derivative Financial Instruments.” Mortgage Note Payable As of June 30, 2024, the Company had total gross mortgage indebtedness of $8.3 million, which was collateralized by related real estate and a tenant’s lease with an aggregate net book value of $12.4 million. The Company incurred debt issuance costs of less than $0.1 million and recorded a debt discount of $0.6 million, both of which are recorded as a reduction of the principal balance in mortgage note payable, net in the Company’s condensed consolidated balance sheets. The mortgage note matures on November 1, 2027, but may be repaid in full beginning August 2027. Debt Maturities Payments on the 2027 Term Loan, 2028 Term Loan, and 2029 Term Loan are interest only through maturity. As of June 30, 2024, scheduled debt maturities, including balloon payments, are as follows (in thousands): Scheduled Principal Balloon Payment (1) Total Remainder of 2024 $ 83 $ — $ 83 2025 170 — 170 2026 178 523,000 523,178 2027 170 7,683 7,853 2028 — 200,000 200,000 Total $ 601 $ 730,683 $ 731,284 (1) Does not assume the exercise of any extension options available to the Company. Interest Expense The following table is a summary of the components of interest expense related to the Company’s borrowings (in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Revolving credit facilities (1) $ 1,636 $ 2,567 $ 2,759 $ 3,716 Term loans (2) 6,491 2,668 12,200 5,168 Mortgage note payable 95 100 190 193 Non-cash: Amortization of deferred financing costs 186 186 423 371 Amortization of debt discount and debt issuance costs, net 401 150 749 301 Amortization of deferred gains on interest rate swaps (979) — (1,958) — Capitalized interest (226) (150) (579) (284) Total interest expense, net $ 7,604 $ 5,521 $ 13,784 $ 9,465 (1) Includes facility fees and non-utilization fees of approximately $0.2 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and facility fees of $0.3 million and $0.3 million for the six months ended June 30, 2024 and 2023, respectively. (2) Includes the effects of interest rate hedges in place as of such date. Deferred financing, discount, and debt issuance costs are amortized over the remaining terms of each respective borrowing and are included in interest expense, net in the Company’s condensed consolidated statements of operations and comprehensive (loss) income. During the three months ended June 30, 2024 and 2023, term loans had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of interest rate hedges, of 6.66% and 6.41%, respectively. During the six months ended June 30, 2024 and 2023, term loans had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of interest rate hedges, of 6.69% and 6.09%, respectively. During the three months ended June 30, 2024 and 2023, the Company incurred interest expense on revolving credit facilities with a weighted average interest rate, exclusive of amortization of deferred financing costs and facility fees, of 6.49% and 5.94%, respectively. During the six months ended June 30, 2024 and 2023, the Company incurred interest expense on revolving credit facilities with a weighted average interest rate, exclusive of amortization of deferred financing costs and facility fees, of 6.51% and 5.92%, respectively. The estimated fair values of the Company’s term loans have been derived based on market observable inputs such as interest rates and discounted cash flow analysis using estimates of the amount and timing of future cash flows. These measurements are classified as Level 2 within the fair value hierarchy. Refer to “Note 2 - Summary of Significant Accounting Policies” for additional detail on fair value measurements. The Company was in compliance with all of its debt covenants as of June 30, 2024 and expects to be in compliance for the twelve-month period ending December 31, 2024. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses interest rate derivative contracts to manage its exposure to changes in interest rates on its variable rate debt. These derivatives are considered cash flow hedges and are recorded on a gross basis at fair value. Assessments of hedge effectiveness are performed quarterly using either a qualitative or quantitative approach. The Company recognizes the entire change in the fair value in Accumulated Other Comprehensive Income (“AOCI”) and the change is reflected as cash flow hedge changes in fair value in the supplemental disclosures of non-cash investing and financing activities in the condensed consolidated statements of cash flows. Effective July 3, 2023, such derivatives were initiated to hedge the variable cash flows associated with the 2029 Term Loan. The interest rate for the variable rate 2029 Term Loan is based on the hedged fixed rate of 3.74% compared to the variable 2029 Term Loan daily SOFR rate as of June 30, 2024 of 5.34%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15%. The maturity dates of the interest rate swaps coincide with the fully extended maturity date of the 2029 Term Loan. Effective September 1, 2022, such derivatives were initiated to hedge the variable cash flows associated with the 2028 Term Loan. The interest rate for the variable rate 2028 Term Loan is based on the hedged fixed rate of 2.63% compared to the variable 2028 Term Loan one-month SOFR rate as of June 30, 2024 of 5.33%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15%. The maturity dates of the interest rate swaps coincide with the maturity date of the 2028 Term Loan. Effective January 27, 2023, the Company converted its four existing LIBOR swap agreements associated with the 2024 Term Loan into four new SOFR swaps that convert the SOFR variable rate to a fixed rate of 0.12% and on June 15, 2023, the Company amended and restated its 2024 Term Loan, providing for the 2027 Term Loan. In anticipation of the amendment and restatement of the 2024 Term Loan, additional derivatives, effective November 27, 2023 and December 23, 2024 at hedged fixed rates of 1.87% and 2.40%, respectively, were initiated to hedge the variable cash flows associated with the 2027 Term Loan through the fully extended maturity date. The interest rate on the variable 2027 Term Loan includes a daily SOFR rate as of June 30, 2024 of 5.31%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15%. Amounts will subsequently be reclassified to earnings when the hedged item affects earnings. The Company does not enter into derivative contracts for speculative or trading purposes and does not have derivative netting arrangements. The Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company evaluates counterparty credit risk through monitoring the creditworthiness of counterparties, which includes review of debt ratings and financial performance. To mitigate credit risk, the Company enters into agreements with counterparties it considers credit-worthy, such as large financial institutions with favorable credit ratings. The Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in thousands, except number of instruments): Number of Instruments Notional Interest Rate Derivatives June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 Interest rate swaps 12 12 $ 650,000 $ 650,000 The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 (in thousands): Derivative Assets Fair Value as of Derivatives Designated as Hedging Instruments: Balance Sheet Location June 30, 2024 December 31, 2023 Interest rate swaps Other assets, net $ 22,035 $ 14,442 Derivative Liabilities Fair Value as of Derivatives Designated as Hedging Instruments: Balance Sheet Location June 30, 2024 December 31, 2023 Interest rate swaps Accounts payable, accrued expenses and other liabilities $ — $ 3,073 The following table presents the effect of the Company's interest rate swaps on the condensed consolidated statements of operations and comprehensive (loss) income for the three and six months ended June 30, 2024 and 2023 (in thousands): Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain (Loss) Reclassified from Accumulated OCI into Income Derivatives in Cash Flow Hedging Relationships 2024 2023 2024 2023 For the Three Months Ended June 30 Interest Rate Products $ 4,446 $ 9,714 Interest expense, net $ 4,866 $ 3,326 For the Six Months Ended June 30 Interest Rate Products $ 18,207 $ 6,572 Interest expense, net $ 9,499 $ 6,163 The Company did not exclude any amounts from the assessment of hedge effectiveness for the three and six months ended June 30, 2024 and 2023. During the next twelve months, the Company estimates that an additional $12.6 million will be reclassified as a decrease to interest expense. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2024, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The table below presents the Company’s derivative assets measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands): Fair Value Hierarchy Level Description Level 1 Level 2 Level 3 Total Fair Value June 30, 2024 Derivative assets $ — $ 22,035 $ — $ 22,035 December 31, 2023 Derivative assets $ — $ 14,442 $ — $ 14,442 Derivative liabilities $ — $ 3,073 $ — $ 3,073 |
Supplemental Detail for Certain
Supplemental Detail for Certain Components of the Condensed Consolidated Balance Sheets | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Detail for Certain Components of the Condensed Consolidated Balance Sheets | Supplemental Detail for Certain Components of the Condensed Consolidated Balance Sheets Other assets, net consist of the following (in thousands): June 30, 2024 December 31, 2023 Accounts receivable, net $ 11,143 $ 10,074 Deferred rent receivable 9,469 7,744 Prepaid assets 3,834 1,387 Earnest money deposits 464 450 Fair value of interest rate swaps 22,035 14,442 Deferred offering costs 1,244 1,031 Deferred financing costs, net 1,571 2,724 Right-of-use asset 3,677 3,866 Leasehold improvements and other corporate assets, net 1,575 1,723 Interest receivable 2,542 1,397 Other assets, net 6,510 4,499 $ 64,064 $ 49,337 Accounts payable, accrued expenses and other liabilities consists of the following (in thousands): June 30, 2024 December 31, 2023 Accrued expenses $ 8,753 $ 8,826 Accrued bonus 736 2,575 Prepaid rent 3,090 3,896 Operating lease liability 4,882 5,104 Accrued interest 3,258 2,921 Deferred rent 3,998 3,257 Accounts payable 812 4,691 Fair value of interest rate swaps — 3,073 Other liabilities 1,839 2,155 $ 27,368 $ 36,498 |
Shareholders_ Equity, Partners_
Shareholders’ Equity, Partners’ Capital and Preferred Equity | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Shareholders’ Equity, Partners’ Capital and Preferred Equity | Shareholders’ Equity, Partners’ Capital and Preferred Equity ATM Program On September 1, 2021, the Company entered into a $250.0 million at-the-market equity program (the “2021 ATM Program”). • In March 2023, the Company issued 146,745 shares of common stock under the 2021 ATM Program at a weighted average price of $20.22 per share for net proceeds of approximately $2.9 million, net of sales commissions and offering costs of less than $0.1 million. The Company contributed the net proceeds to the Operating Partnership in exchange for 146,745 Class A units of limited partnership of the Operating Partnership (“Class A OP Units”). • In June 2023, the Company issued 1,364,815 shares of common stock under the 2021 ATM Program at a weighted average price of $17.53 per share for net proceeds of approximately $23.4 million, net of sales commissions and offering costs of $0.3 million. The Company contributed the net proceeds to the Operating Partnership in exchange for 1,364,815 Class A OP Units. On September 14, 2023, the Company entered into a forward confirmation with respect to 7,500,000 shares of its common stock under the 2021 ATM Program. • On June 26, 2024, the Company partially physically settled 4,000,000 shares of common stock at a price of $16.43 per share under such forward confirmation for net proceeds of approximately $65.3 million, net of sales commissions and offering costs of $0.7 million. As of June 30, 2024, 1,983,711 shares remain unsettled under the forward confirmation. On October 25, 2023, the Company entered into a $300.0 million at-the-market equity program (the “2023 ATM Program”) through which, from time to time, it may sell shares of its common stock in registered transactions. Effective October 24, 2023, in connection with the establishment of the new at-the-market offering program, the 2021 ATM Program was terminated. On March 28, 2024, the Company entered into a forward confirmation with respect to 107,500 shares of its common stock under the 2023 ATM Program, at a public offering price of $18.29 per share. 107,500 shares remain unsettled under the forward confirmation as of June 30, 2024. The Company may physically settle this forward confirmation (by the delivery of shares of common stock) and receive proceeds from the sale of those shares on one or more forward settlement dates, which shall occur no later than April 12, 2025. During April 2024, the Company entered into forward sale agreements with respect to an aggregate 1,635,600 shares of its common stock under the 2023 ATM Program at a weighted average price of $17.63 per share. The Company did not initially receive any proceeds from the sale of shares of common stock by the forward purchaser. The Company expects to physically settle the forward sale agreements (by delivery of shares of common stock) and receive proceeds from the sale of those shares upon one or more forward settlement dates, which shall occur no later than April 12, 2025. The Company may also elect to cash settle or net share settle all or a portion of its obligations under a forward sale agreement if it concludes it is in its best interest to do so. No physical settlement has occurred through the date on which these condensed consolidated financial statements were issued. If the Company elects to cash settle a forward sale agreement, it may not receive any proceeds and it may owe cash to the relevant forward counterparty in certain circumstances. As of June 30, 2024, the Company has $222.7 million remaining gross proceeds available for future issuances of shares of common stock under the 2023 ATM Program, inclusive of unsettled shares under forward confirmation. The following table presents information about the 2023 ATM Program and the 2021 ATM Program (in thousands): Maximum Sales Authorization Gross Sales through June 30, 2024 Program Name Date Established Date Terminated 2021 ATM Program (1) September 2021 October 2023 $ 250,000 $ 216,391 2023 ATM Program (2) October 2023 — $ 300,000 $ 77,323 (1) As of June 30, 2024, 1,983,711 shares remain unsettled under the forward confirmation at the available net settlement price of $16.44. (2) As of June 30, 2024, 1,743,100 shares remain unsettled under the forward confirmation as of June 30, 2024 at the available net settlement price of $17.54. January 2024 Follow-On Offering In January 2024, the Company completed a registered public offering of 11,040,000 shares of its common stock at a public offering price of $18.00 per share. In connection with the offering, the Company entered into forward sale agreements for 11,040,000 shares of its common stock. The Company did not initially receive any proceeds from the sale of shares of common stock by the forward purchasers. The Company expects to physically settle the forward sale agreements (by delivery of shares of common stock) and receive proceeds from the sale of those shares upon one or more forward settlement dates, which shall occur no later than January 9, 2025. The Company may also elect to cash settle or net share settle all or a portion of its obligations under a forward sale agreement if it concludes it is in its best interest to do so. If the Company elects to cash settle a forward sale agreement, it may not receive any proceeds and it may owe cash to the relevant forward counterparty in certain circumstances. As of June 30, 2024, 11,040,000 shares remain unsettled under the January 2024 forward sale agreements. Surrendered Shares on Vested Stock Unit Awards During the six months ended June 30, 2024 and 2023, portions of restricted stock unit awards (“RSUs”) granted to certain of the Company’s officers, directors, and employees vested. The vesting of these awards, granted pursuant to the NETSTREIT Corp. 2019 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), resulted in federal and state income tax liabilities for the recipients. During the six months ended June 30, 2024 and 2023, as permitted by the terms of the Omnibus Incentive Plan and the award grants, certain executive officers and employees elected to surrender an approximate total of 71 thousand and 18 thousand RSUs, respectively, valued at approximately $1.2 million and $0.4 million, respectively, solely to pay the associated statutory tax withholding. The surrendered RSUs are included in the row entitled “repurchase of common stock for tax withholding obligations” in the condensed consolidated statements of cash flows. Dividends During the six months ended June 30, 2024, the Company declared and paid the following common stock dividends (in thousands, except per share data): Six Months Ended June 30, 2024 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 13, 2024 $ 0.205 March 15, 2024 $ 15,031 March 28, 2024 April 23, 2024 0.205 June 3, 2024 15,042 June 14, 2024 $ 0.410 $ 30,073 During the six months ended June 30, 2023, the Company declared and paid the following common stock dividends (in thousands, except per share data): Six Months Ended June 30, 2023 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 21, 2023 $ 0.200 March 15, 2023 $ 11,650 March 30, 2023 April 25, 2023 0.200 June 1, 2023 12,173 June 15, 2023 $ 0.400 $ 23,823 The holders of OP Units are entitled to an equal distribution per each OP Unit held as of each record date. Accordingly, during each of the six months ended June 30, 2024 and 2023, the Operating Partnership paid distributions of $0.2 million to holders of OP Units. Noncontrolling Interests |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock-Based Compensation Under the Omnibus Incentive Plan, 2,094,976 shares of common stock are reserved for issuance. The Omnibus Incentive Plan provides for the grant of stock options, stock appreciation rights, restricted shares, RSUs, long-term incentive plan units, dividend equivalent rights, and other share-based, share-related or cash-based awards, including performance-based awards, to employees, directors and consultants, with each grant evidenced by an award agreement providing the terms of the award. The Omnibus Incentive Plan is administered by the Compensation Committee of the Board of Directors. As of June 30, 2024, the only stock-based compensation granted by the Company were RSUs. The total amount of stock-based compensation costs recognized in general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive (loss) income was $1.5 million for the three months ended June 30, 2024 and $1.3 million for the three months ended June 30, 2023. Stock-based compensation expense was $3.3 million for the six months ended June 30, 2024 and $2.3 million for the six months ended June 30, 2023. All awards of unvested restricted stock units are expected to fully vest over the next one Performance-Based RSUs (effectiveness of Initial Public Offering) Pursuant to the Omnibus Incentive Plan, the Company made performance-based RSUs to certain employees and non-employee directors. The performance condition required the Company to effectively file a resale registration statement. Up until the point of filing the registration statement, performance was not deemed probable and accordingly, no RSUs had the capability of vesting and no stock-based compensation expense was recorded. As a result of the Company's initial public offering in August 2020, the performance condition was satisfied and the Company recorded a stock-based compensation expense catch-up adjustment of $1.4 million. The vesting terms of these grants are specific to the individual grant and are expected to fully vest during the current year. The following table summarizes performance-based RSU activity for the period ended June 30, 2024: Shares Weighted Average Grant Date Fair Value per Share Unvested RSU grants outstanding as of December 31, 2023 30,379 $ 19.75 Granted during the period — — Forfeited during the period — — Vested during the period — — Unvested RSU grants outstanding as of June 30, 2024 30,379 $ 19.75 For both the three and six months ended June 30, 2024, the Company recognized less than $0.1 million in stock-based compensation expense associated with performance-based RSUs. As of June 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled less than $0.1 million, and as of June 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 0.5 years. These units are subject to graded vesting and stock-based compensation expense is recognized ratably over the requisite service period for each vesting tranche in the award. The grant date fair value of unvested RSUs is calculated as the per share price in the private offering that closed on December 23, 2019. Service-Based RSUs Pursuant to the Omnibus Incentive Plan, the Company has made service-based RSU grants to certain employees and non-employee directors. The vesting terms of these grants are specific to the individual grant and vest in equal annual installments over the next one The following table summarizes service-based RSU activity for the period ended June 30, 2024: Shares Weighted Average Grant Date Fair Value per Share Unvested RSU grants outstanding as of December 31, 2023 298,108 $ 19.79 Granted during the period 200,140 17.33 Forfeited during the period (1,034) 18.10 Vested during the period (153,047) 19.72 Unvested RSU grants outstanding as of June 30, 2024 344,167 $ 18.39 For the three and six months ended June 30, 2024, the Company recognized $0.9 million and $1.9 million, respectively, in stock-based compensation expense associated with service-based RSUs. As of June 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled $4.8 million and $3.4 million, respectively, and as of June 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 2.1 years. Stock-based compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. The grant date fair value of service-based unvested RSUs is calculated as the per share price determined in the initial public offering for awards granted in 2020, and as the per share price of the Company’s stock on the date of grant for those granted in years subsequent to 2020. Performance-Based RSUs (total shareholder return) Pursuant to the Omnibus Incentive Plan, the Company has made market-based RSU grants to certain employees. These grants are subject to the participant’s continued service over a three year period with 40% of the award based on the Company’s total shareholder return (“TSR”) as compared to the TSR of identified peer companies and 60% of the award based on total absolute TSR over the cumulative three year period. The performance period of these grants runs through February 28, 2025, February 28, 2026, and December 31, 2026. Grant date fair value of the market-based share awards was calculated using the Monte Carlo simulation model, which incorporated stock price volatility of the Company and each of the Company’s peers and other variables over the performance period. Significant inputs for the current period calculation were expected volatility of the Company of 24.9% and expected volatility of the Company's peers, ranging from 19.9% to 49.4%, with an average volatility of 27.1% and a risk-free interest rate of 4.41%. The fair value per share on the grant date specific to the target TSR relative to the Company’s peers was $18.03 and the target absolute TSR was $14.56 for a weighted average grant date fair value of $15.77 per share. Stock-based compensation expense associated with unvested market-based share awards is recognized on a straight-line basis over the minimum required service period, which is three years. The following table summarizes market-based RSU activity for the period ended June 30, 2024: Shares Weighted Average Grant Date Fair Value per Share Unvested RSU grants outstanding as of December 31, 2023 258,558 $ 20.38 Granted during the period 169,002 16.05 Forfeited during the period (75,229) 17.26 Vested during the period (46,660) 20.36 Unvested RSU grants outstanding as of June 30, 2024 305,671 $ 18.76 For the three and six months ended June 30, 2024, the Company recognized $0.5 million and $1.1 million, respectively, in stock-based compensation expense associated with market-based RSUs. As of June 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled $3.4 million and $2.1 million, respectively, and as of June 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 2.2 years. Alignment of Interest Program During March 2021, the Company adopted the Alignment of Interest Program (the “Program”), which allows employees to elect to receive a portion of their annual bonus in RSUs in the first quarter of the following year, that vests from one |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Net (loss) income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings per Share. Basic earnings per share is computed by dividing net (loss) income attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is similarly calculated except that the denominator is increased by using the treasury stock method to determine the potential dilutive effect of the Company’s outstanding unvested RSUs and unsettled shares under open forward equity contracts and using the if-converted method to determine the potential dilutive effect of the OP Units. The Company has noncontrolling interests in the form of OP Units which are convertible into common stock and represent potentially dilutive securities, as the OP Units may be redeemed for cash or, at the Company’s election, exchanged for shares of the Company’s common stock on a one-for-one basis. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net (loss) income per common share for the three and six months ended June 30, 2024 and 2023. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2024 2023 2024 2023 Numerator: Net (loss) income $ (2,306) $ (792) $ (1,254) $ 689 Net loss (income) attributable to noncontrolling interest 15 1 8 (8) Net (loss) income attributable to common shares, basic (2,291) (791) (1,246) 681 Net (loss) income attributable to noncontrolling interest (15) (1) (8) 8 Net (loss) income attributable to common shares, diluted $ (2,306) $ (792) $ (1,254) $ 689 Denominator: Weighted average common shares outstanding, basic 73,588,605 61,043,531 73,419,198 59,600,630 Effect of dilutive shares for diluted net income per common share: OP Units — — — 509,588 Unvested RSUs — — — 164,322 Unsettled shares under open forward equity contracts — — — 20,194 Weighted average common shares outstanding, diluted 73,588,605 61,043,531 73,419,198 60,294,734 Net (loss) income available to common stockholders per common share, basic $ (0.03) $ (0.01) $ (0.02) $ 0.01 Net (loss) income available to common stockholders per common share, diluted $ (0.03) $ (0.01) $ (0.02) $ 0.01 For the three months ended June 30, 2024 and 2023, diluted net loss per common share does not assume the conversion of 440,654 and 507,773 OP Units, respectively, 69,023 and 152,785 unvested RSUs, respectively, and 254,299 unsettled shares under open forward equity contracts for the three months ended June 30, 2024, as such conversion would be antidilutive. For the six months ended June 30, 2024, diluted net loss per common share does not assume the conversion of 459,520 OP Units, 118,790 unvested RSUs, or 462,103 unsettled shares under open forward equity contracts, as such conversion would be antidilutive. As of June 30, 2024 and December 31, 2023, there were 437,058 and 479,298 of OP Units outstanding, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Regulatory Matters In the ordinary course of business, from time to time, the Company may be subject to litigation, claims and regulatory matters, none of which are currently outstanding, which the Company believes could have, individually or in the aggregate, a material adverse effect on its business, financial condition or results of operations, liquidity or cash flows. Environmental Matters The Company is subject to environmental regulations related to the ownership of real estate. The cost of complying with the environmental regulations was not material to the Company’s results of operations for any of the periods presented. The Company is not aware of any environmental condition on any of its properties that is likely to have a material adverse effect on the condensed consolidated financial statements when the fair value of such liability can be reasonably estimated and is required to be recognized. Commitments In the normal course of business, the Company enters into various types of commitments to purchase real estate properties, fund development projects, or extend funds under mortgage notes receivable. These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase or extend funding. As of June 30, 2024, the Company had tenant improvement allowance commitments totaling approximately $4.1 million, which is expected to be funded within the next two years. Additionally, as of June 30, 2024, the Company had commitments to fund properties under development totaling $16.1 million, which is expected to be funded over the next 18 months. The Company also had commitments to extend funds under mortgage notes receivable of $15.3 million as of June 30, 2024, which is expected to occur over the next 12 months. In August 2021, the Company entered into a lease agreement on a new corporate office space, which is classified as an operating lease. The Company began operating out of the new office in February 2022. The lease has a remaining noncancellable term of 8.1 years that expires on July 31, 2032 and is renewable at the Company’s option for two additional periods of five years. Annual rent expense, excluding operating expenses, is approximately $0.5 million during the initial term. As of June 30, 2024, the Company did not have any other material commitments for re-leasing costs, recurring capital expenditures, non-recurring building improvements, or similar types of costs. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated all events that occurred subsequent to June 30, 2024 through the date on which these condensed consolidated financial statements were issued to determine whether any of these events required disclosure in the financial statements. Common Stock Dividend On July 23, 2024, the Company's Board of Directors declared a cash dividend of $0.21 per share for the third quarter of 2024. The dividend will be paid on September 13, 2024 to stockholders of record on September 3, 2024. Revolver Activity |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Interim Unaudited Financial Information | Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying condensed consolidated financial statements include the accounts of the Company and subsidiaries in which the Company has a controlling financial interest. All intercompany accounts and transactions have been eliminated in consolidation and the Company’s net (loss) income is reduced by the portion of net (loss) income attributable to noncontrolling interests. Interim Unaudited Financial Information |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most significant assumptions and estimates relate to the useful lives of real estate assets, lease accounting, real estate impairment assessments, and allocation of fair value of purchase consideration. These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances. The Company evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Fair value measurement of an asset group occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. An example of an event or changed circumstance is a reduction in the expected holding period of a property. If indicators are present, the Company will prepare a projection of the undiscounted future cash flows of the property, excluding interest charges, and determine if the carrying amount of the asset group is recoverable. When a carrying amount is not recoverable, an impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair market value. The Company estimates fair value using data such as operating income, estimated capitalization rates or multiples, leasing prospects, local market information, and discount rates, and with regard to assets held for sale, based on the estimated or negotiated selling price, less estimated costs of disposal. Based on these unobservable inputs, the Company determined that its valuations of impaired real estate and intangible assets fall within Level 2 and Level 3 of the fair value hierarchy under ASC Topic 820. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all cash balances, money market accounts and highly liquid investments with original maturities of three months or less to be cash and cash equivalents. Restricted cash includes cash restricted for property tenant improvements and cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the Code. Restricted cash is included in cash, cash equivalents, and restricted cash in the condensed consolidated balance sheets. The Company had $0.5 million of restricted cash as of June 30, 2024, and $11.5 million of restricted cash as of December 31, 2023. The Company’s bank balances as of June 30, 2024 and December 31, 2023 included certain amounts over the Federal Deposit Insurance Corporation limits. |
Fair Value Measurement | Fair Value Measurement Fair value measurements are utilized in the accounting of the Company’s assets acquired and liabilities assumed in an asset acquisition and also affect the Company’s accounting for certain of its financial assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 inputs, such as quoted prices in an active market; Level 2 inputs, which are observable inputs for similar assets; or Level 3 inputs, which are unobservable inputs. The Company uses the following inputs in its fair value measurements: – Level 2 and Level 3 inputs for its debt and derivative financial instrument fair value disclosures. See “Note 6 - Debt” and “Note 7 - Derivative Financial Instruments,” respectively; and – Level 2 and Level 3 inputs when assessing the fair value of assets and liabilities in connection with real estate acquisitions and impairment. See “Note 4 - Real Estate Investments.” Additionally, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based on market conditions and perceived risks as of June 30, 2024 and December 31, 2023. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The fair value of the Company’s cash, cash equivalents and restricted cash (including money market accounts), other assets and accounts payable, accrued expenses and other liabilities approximate their carrying value because of the short-term nature of these instruments. Additionally, the Company believes the following financial instruments have carrying values that approximate their fair values as of June 30, 2024: • Borrowings under the Company’s Revolver (as defined in “Note 6 - Debt”) approximate fair value based on their nature, terms and variable interest rates. • Carrying values of the Company’s mortgage loans receivable approximate fair values based on a number of factors, including either their short-term nature, the availability of market quotes for comparable instruments, and a discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates, and credit spreads. • Carrying value of the Company’s mortgage note payable approximates fair value based on a discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates, and credit spreads. Provisions for impairment recognized during the three and six months ended June 30, 2024 partially related to assets held for sale where impairment was determined based on the estimated or negotiated selling price, less costs of disposal, compared to the carrying value of the property. The Company also recorded $1.9 million and $4.1 million of impairment expense on two and six properties held for investment, respectively, during the three and six months ended June 30, 2024. These properties were accounted for at fair value on a nonrecurring basis using a cash flow model (Level 3 inputs) with adjusted carrying values ranging from $0.2 million to $4.8 million. The Company estimated the fair value using a capitalization rates ranging from 7.6% to 12.1% which it believes is reasonable based on current market rates. As of December 31, 2023, there were two real estate assets held for investment accounted for at fair value. Of these properties, one was accounted for at fair value on a nonrecurring basis using a cash flow model (Level 3 inputs) with an adjusted carrying value of $1.5 million. The following table discloses estimated fair value information for the Company’s 2027 Term Loan, 2028 Term Loan, and 2029 Term Loan (each as defined in “Note 6 - Debt”) which is derived based primarily on unobservable market inputs such as interest rates and discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates and credit spreads (in thousands): |
Concentrations of Credit Risk | Concentrations of Credit Risk |
Segment Reporting | Segment Reporting ASC Topic 280, Segment Reporting, establishes standards for the manner in which companies report information about operating segments. Substantially all of the Company’s investments, at acquisition, are comprised of real estate owned that is leased to tenants on a long-term basis or real estate that secures the Company's investment in mortgage loans receivable. The Company allocates resources and assesses operating performance based on individual investment and property needs. Therefore, the Company aggregates these investments for reporting purposes and operates in one reportable segment. Recent Accounting Pronouncements Issued But Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosures by requiring disclosure of incremental segment information on an annual and interim basis such as, annual and interim disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, interim disclosure of a reportable segment’s profit or loss and assets, and the requirement that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280. The amendments in ASU 2023-07 do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The disclosures are applied retrospectively to all periods presented and early adoption is permitted. The Company has one reportable segment and continues to evaluate additional disclosures that may be required for entities with a single reportable segment. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Provision for Impairment | The following table summarizes the provision for impairment during the periods indicated below (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Total provision for impairment $ 3,836 $ 2,836 $ 7,498 $ 2,836 Number of properties: (1) Classified as held for sale 5 6 5 6 Disposed within the period 1 — 7 — (1) Includes the number of properties that were either (i) impaired during the period on the held for sale classification date and remained as held for sale as of period-end or (ii) impaired and disposed of during the respective period. Excludes properties that did not have impairment recorded during the period. Of the total provision for impairment during the three months ended June 30, 2024, the Company recorded $1.1 million of additional impairment expense on four properties that were classified as held for sale in prior periods, and $1.9 million of impairment expense on two properties held for investment. Of the total provision for impairment during the six months ended June 30, 2024, the Company recorded $1.4 million of additional impairment expense on five properties that were classified as held for sale in prior periods and $4.1 million of impairment expense on six properties held for investment. |
Fair Value of Term Loans | June 30, 2024 December 31, 2023 Carrying Value (1) Estimated Fair Value Carrying Value (1) Estimated Fair Value 2027 Term Loan $ 174,273 $ 175,493 $ 174,037 $ 175,641 2028 Term Loan 199,126 201,242 199,006 201,396 2029 Term Loan 248,471 250,909 148,869 150,666 (1) The carrying value of the debt instruments are net of unamortized debt issuance and discount costs. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Disaggregation of Lease Income | The following table provides a disaggregation of lease income recognized under ASC 842 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Rental revenue Fixed lease income (1) $ 33,788 $ 26,808 $ 65,653 $ 51,531 Variable lease income (2) 2,978 2,715 6,207 6,252 Other rental revenue: Above/below market lease amortization, net 287 377 573 789 Lease incentives (189) (193) (380) (392) Rental revenue (including reimbursable) $ 36,864 $ 29,707 $ 72,053 $ 58,180 (1) Fixed lease income includes contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term. (2) Variable lease income primarily includes tenant reimbursements for real estate taxes, insurance, common area maintenance, and lease termination fees, and reserves for uncollectible amounts. There were no material reserves, write-offs, or recoveries of uncollectible amounts during the three and six months ended June 30, 2024 and 2023. |
Schedule of Future Minimum Base Rental Receipts | Scheduled future minimum base rental payments (excluding base rental payments from properties classified as held for sale and straight line rent adjustments for all properties) due to be received under the remaining non-cancelable term of the operating leases in place as of June 30, 2024 are as follows (in thousands): Future Minimum Base Remainder of 2024 $ 66,247 2025 132,701 2026 130,639 2027 127,206 2028 120,591 Thereafter 736,410 Total $ 1,313,794 |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Real Estate [Abstract] | |
Allocation of Purchase Price Paid for Completed Acquisitions | An allocation of the purchase price and acquisition costs paid for the completed acquisitions is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Land $ 28,264 $ 19,748 $ 44,872 $ 34,052 Buildings 55,508 56,869 114,887 100,002 Site improvements 7,001 5,490 13,429 8,969 Tenant improvements 359 1,168 1,804 1,559 In-place lease intangible assets 4,479 11,399 15,772 17,809 Above-market lease intangible assets — 1,543 — 1,543 Purchase price (including acquisition costs) $ 95,611 $ 96,217 $ 190,764 $ 163,934 |
Schedule of Mortgage Loans Receivable | The Company’s mortgage loans receivable portfolio as of June 30, 2024 and December 31, 2023 is summarized below (in thousands): Loan Type Monthly Payment (1) Number of Secured Properties Effective Interest Rate (2) Stated Interest Rate Maturity Date June 30, 2024 December 31, 2023 Mortgage (3) (4) I/O 1 7.60% 7.50% 1/8/2025 $ 43,612 $ 43,612 Mortgage (4) I/O 46 9.55% 9.55% 3/10/2026 41,940 41,940 Mortgage (4) (5) I/O 3 8.11% 6.89% 4/10/2026 4,132 4,132 Mortgage (3) (4) (5) I/O 9 7.59% 7.59% 6/10/2025 14,024 14,024 Mortgage None (6) 1 7.73% 8.50% 12/29/2024 660 660 Mortgage (3) P+I 1 9.32% 7.50% 1/8/2025 3,231 3,246 Mortgage (3) (4) (7) I/O 12 8.80% 10.25% 6/18/2025 16,823 5,007 Mortgage (3) (4) I/O 2 14.10% 10.25% 12/22/2024 4,149 1,909 Mortgage (3) (4) I/O 1 10.25% 10.25% 4/26/2025 819 — Mortgage (3) (4) I/O 1 10.25% 10.25% 5/15/2025 784 — Total 130,174 114,530 Unamortized loan origination costs and fees, net 20 58 Unamortized discount (252) (116) Total mortgage loans receivable, net $ 129,941 $ 114,472 (1) I/O: Interest Only; P+I: Principal and Interest. (2) Includes amortization of discount, loan origination costs and fees, as applicable. (3) The Company has the right, subject to certain terms and conditions, to acquire all or a portion of the underlying collateralized properties. (4) Loans require monthly payments of interest only with principal payments occurring as borrower disposes of underlying properties, limited to the Company’s allocated investment by property. Any remaining principal balance will be repaid at or before the maturity date. (5) The stated interest rate is variable up to 15.0% and is calculated based on contractual rent for existing collateralized properties subject to the loan agreement. (6) Payments of both interest and principal are due at maturity. (7) |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets and Liabilities | Intangible assets and liabilities consisted of the following (in thousands): June 30, 2024 December 31, 2023 Gross Accumulated Amortization Net Carrying Amount Gross Accumulated Amortization Net Carrying Amount Assets: In-place leases $ 191,928 $ (53,058) $ 138,870 $ 181,564 $ (45,210) $ 136,354 Above-market leases 21,634 (5,163) 16,471 21,661 (4,361) 17,300 Lease incentives 8,541 (1,609) 6,932 8,996 (1,296) 7,700 Total intangible assets $ 222,103 $ (59,830) $ 162,273 $ 212,221 $ (50,867) $ 161,354 Liabilities: Below-market leases $ 33,062 $ (9,186) $ 23,876 $ 33,196 $ (7,843) $ 25,353 |
Weighted Average Amortization Period for Intangible Assets and Liabilities | The remaining weighted average amortization period for the Company’s intangible assets and liabilities as of June 30, 2024 and as of December 31, 2023 by category were as follows: Years Remaining June 30, 2024 December 31, 2023 In-place leases 8.9 8.8 Above-market leases 11.8 12.2 Below-market leases 10.5 10.9 Lease incentives 10.5 11.1 |
Amortization of Intangible Assets and Liabilities | The following amounts in the accompanying condensed consolidated statements of operations and comprehensive (loss) income related to the amortization of intangible assets and liabilities for all property and ground leases (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Amortization: Amortization of in-place leases $ 5,196 $ 4,809 $ 10,071 $ 9,479 Net adjustment to rental revenue: Above-market lease assets (93) (391) (188) (762) Below-market lease liabilities 380 768 761 1,551 Lease incentives (189) (193) (380) (392) $ 98 $ 184 $ 193 $ 397 |
Projected Amortization of Intangible Assets and Liabilities | The following table provides the projected amortization of in-place lease assets to amortization expense and the net amortization of above-market, below-market, and lease incentive lease intangible assets and liabilities to rental revenue as of June 30, 2024, for the next five years and thereafter (in thousands): Remainder of 2024 2025 2026 2027 2028 Thereafter Total In-place leases $ 10,388 $ 20,525 $ 19,319 $ 17,352 $ 14,548 $ 56,738 $ 138,870 Above-market lease assets $ (828) $ (1,655) $ (1,632) $ (1,568) $ (1,523) $ (9,265) $ (16,471) Below-market lease liabilities 1,394 2,771 2,681 2,610 2,478 11,942 23,876 Lease incentives (375) (751) (751) (695) (665) (3,695) (6,932) Net adjustment to rental revenue $ 191 $ 365 $ 298 $ 347 $ 290 $ (1,018) $ 473 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table provides the projected amortization of in-place lease assets to amortization expense and the net amortization of above-market, below-market, and lease incentive lease intangible assets and liabilities to rental revenue as of June 30, 2024, for the next five years and thereafter (in thousands): Remainder of 2024 2025 2026 2027 2028 Thereafter Total In-place leases $ 10,388 $ 20,525 $ 19,319 $ 17,352 $ 14,548 $ 56,738 $ 138,870 Above-market lease assets $ (828) $ (1,655) $ (1,632) $ (1,568) $ (1,523) $ (9,265) $ (16,471) Below-market lease liabilities 1,394 2,771 2,681 2,610 2,478 11,942 23,876 Lease incentives (375) (751) (751) (695) (665) (3,695) (6,932) Net adjustment to rental revenue $ 191 $ 365 $ 298 $ 347 $ 290 $ (1,018) $ 473 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consists of the following (in thousands): Amounts Outstanding as of Contractual Fully Extended Maturity Date (1) Interest Rate (2) June 30, 2024 December 31, 2023 Debt: 2027 Term Loan (3) January 15, 2026 January 15, 2027 3.12% $ 175,000 $ 175,000 2028 Term Loan (4) February 11, 2028 — 3.88% 200,000 200,000 2029 Term Loan (5) July 3, 2026 January 3, 2029 4.99% 250,000 150,000 Revolver (6) August 11, 2026 August 11, 2027 6.43% 98,000 80,000 Mortgage Note November 1, 2027 — 4.53% 8,284 8,361 Total debt 731,284 613,361 Unamortized discount and debt issuance costs (3,546) (3,566) Unamortized deferred financing costs, net (7) (1,571) (1,942) Total debt, net $ 726,167 $ 607,853 (1) Date represents the fully extended maturity date available to the Company, subject to certain conditions, under each related debt instrument. ( 2 ) Rate represents the effective interest rate as of June 30, 2024 and includes the effect of interest rate swap agreements, as described further in “Note 6 - Debt” and “Note 7 - Derivative Financial Instruments.” (3) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.15% as of June 30, 2024. The Company has entered into five interest rate swap agreements that effectively convert the floating rate to a fixed rate. The hedged fixed rate reset effective November 27, 2023 to 1.87% and will reset again effective December 23, 2024 to 2.40%. (4) Loan is a floating-rate loan which resets monthly at one-month term SOFR plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.15% as of June 30, 2024. The Company has entered into three interest rate swap agreements that effectively convert the floating rate to a fixed rate. (5) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.15% as of June 30, 2024. The Company has entered into four interest rate swap agreements that effectively convert the floating rate to a fixed rate. (6) The annual interest rate of the Revolver assumes daily SOFR as of June 30, 2024 of 5.34% plus a SOFR adjustment of 0.10% plus the applicable margin which was 1.00% as of June 30, 2024. (7) The Company records deferred financing costs associated with the Revolver in other assets, net on its condensed consolidated balance sheets. The Company reclassed the net amount of loan commitment fees associated with the 2029 Term Loan from other assets, net to debt issuance costs upon the $100.0 million draw under the 2029 Term Loan. |
Schedule of Debt Maturities | Payments on the 2027 Term Loan, 2028 Term Loan, and 2029 Term Loan are interest only through maturity. As of June 30, 2024, scheduled debt maturities, including balloon payments, are as follows (in thousands): Scheduled Principal Balloon Payment (1) Total Remainder of 2024 $ 83 $ — $ 83 2025 170 — 170 2026 178 523,000 523,178 2027 170 7,683 7,853 2028 — 200,000 200,000 Total $ 601 $ 730,683 $ 731,284 |
Interest Income and Interest Expense Disclosure | The following table is a summary of the components of interest expense related to the Company’s borrowings (in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Revolving credit facilities (1) $ 1,636 $ 2,567 $ 2,759 $ 3,716 Term loans (2) 6,491 2,668 12,200 5,168 Mortgage note payable 95 100 190 193 Non-cash: Amortization of deferred financing costs 186 186 423 371 Amortization of debt discount and debt issuance costs, net 401 150 749 301 Amortization of deferred gains on interest rate swaps (979) — (1,958) — Capitalized interest (226) (150) (579) (284) Total interest expense, net $ 7,604 $ 5,521 $ 13,784 $ 9,465 (1) Includes facility fees and non-utilization fees of approximately $0.2 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, and facility fees of $0.3 million and $0.3 million for the six months ended June 30, 2024 and 2023, respectively. (2) |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | Number of Instruments Notional Interest Rate Derivatives June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 Interest rate swaps 12 12 $ 650,000 $ 650,000 |
Fair Value of Derivative Financial Instruments | The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 (in thousands): Derivative Assets Fair Value as of Derivatives Designated as Hedging Instruments: Balance Sheet Location June 30, 2024 December 31, 2023 Interest rate swaps Other assets, net $ 22,035 $ 14,442 Derivative Liabilities Fair Value as of Derivatives Designated as Hedging Instruments: Balance Sheet Location June 30, 2024 December 31, 2023 Interest rate swaps Accounts payable, accrued expenses and other liabilities $ — $ 3,073 |
Effect of Interest Rate Swaps | The following table presents the effect of the Company's interest rate swaps on the condensed consolidated statements of operations and comprehensive (loss) income for the three and six months ended June 30, 2024 and 2023 (in thousands): Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain (Loss) Reclassified from Accumulated OCI into Income Derivatives in Cash Flow Hedging Relationships 2024 2023 2024 2023 For the Three Months Ended June 30 Interest Rate Products $ 4,446 $ 9,714 Interest expense, net $ 4,866 $ 3,326 For the Six Months Ended June 30 Interest Rate Products $ 18,207 $ 6,572 Interest expense, net $ 9,499 $ 6,163 |
Schedule of Derivative Liabilities at Fair Value | The table below presents the Company’s derivative assets measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands): Fair Value Hierarchy Level Description Level 1 Level 2 Level 3 Total Fair Value June 30, 2024 Derivative assets $ — $ 22,035 $ — $ 22,035 December 31, 2023 Derivative assets $ — $ 14,442 $ — $ 14,442 Derivative liabilities $ — $ 3,073 $ — $ 3,073 |
Supplemental Detail for Certa_2
Supplemental Detail for Certain Components of the Condensed Consolidated Balance Sheets (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Assets, net | Other assets, net consist of the following (in thousands): June 30, 2024 December 31, 2023 Accounts receivable, net $ 11,143 $ 10,074 Deferred rent receivable 9,469 7,744 Prepaid assets 3,834 1,387 Earnest money deposits 464 450 Fair value of interest rate swaps 22,035 14,442 Deferred offering costs 1,244 1,031 Deferred financing costs, net 1,571 2,724 Right-of-use asset 3,677 3,866 Leasehold improvements and other corporate assets, net 1,575 1,723 Interest receivable 2,542 1,397 Other assets, net 6,510 4,499 $ 64,064 $ 49,337 |
Schedule of Accounts Payable, Accrued Expenses and Other Liabilities | Accounts payable, accrued expenses and other liabilities consists of the following (in thousands): June 30, 2024 December 31, 2023 Accrued expenses $ 8,753 $ 8,826 Accrued bonus 736 2,575 Prepaid rent 3,090 3,896 Operating lease liability 4,882 5,104 Accrued interest 3,258 2,921 Deferred rent 3,998 3,257 Accounts payable 812 4,691 Fair value of interest rate swaps — 3,073 Other liabilities 1,839 2,155 $ 27,368 $ 36,498 |
Shareholders_ Equity, Partner_2
Shareholders’ Equity, Partners’ Capital and Preferred Equity (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Common Stock Dividends Declared and Paid | During the six months ended June 30, 2024, the Company declared and paid the following common stock dividends (in thousands, except per share data): Six Months Ended June 30, 2024 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 13, 2024 $ 0.205 March 15, 2024 $ 15,031 March 28, 2024 April 23, 2024 0.205 June 3, 2024 15,042 June 14, 2024 $ 0.410 $ 30,073 During the six months ended June 30, 2023, the Company declared and paid the following common stock dividends (in thousands, except per share data): Six Months Ended June 30, 2023 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 21, 2023 $ 0.200 March 15, 2023 $ 11,650 March 30, 2023 April 25, 2023 0.200 June 1, 2023 12,173 June 15, 2023 $ 0.400 $ 23,823 |
Schedule of ATM Program Activity | The following table presents information about the 2023 ATM Program and the 2021 ATM Program (in thousands): Maximum Sales Authorization Gross Sales through June 30, 2024 Program Name Date Established Date Terminated 2021 ATM Program (1) September 2021 October 2023 $ 250,000 $ 216,391 2023 ATM Program (2) October 2023 — $ 300,000 $ 77,323 (1) As of June 30, 2024, 1,983,711 shares remain unsettled under the forward confirmation at the available net settlement price of $16.44. (2) As of June 30, 2024, 1,743,100 shares remain unsettled under the forward confirmation as of June 30, 2024 at the available net settlement price of $17.54. |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Unit Activity | The following table summarizes performance-based RSU activity for the period ended June 30, 2024: Shares Weighted Average Grant Date Fair Value per Share Unvested RSU grants outstanding as of December 31, 2023 30,379 $ 19.75 Granted during the period — — Forfeited during the period — — Vested during the period — — Unvested RSU grants outstanding as of June 30, 2024 30,379 $ 19.75 The following table summarizes service-based RSU activity for the period ended June 30, 2024: Shares Weighted Average Grant Date Fair Value per Share Unvested RSU grants outstanding as of December 31, 2023 298,108 $ 19.79 Granted during the period 200,140 17.33 Forfeited during the period (1,034) 18.10 Vested during the period (153,047) 19.72 Unvested RSU grants outstanding as of June 30, 2024 344,167 $ 18.39 The following table summarizes market-based RSU activity for the period ended June 30, 2024: Shares Weighted Average Grant Date Fair Value per Share Unvested RSU grants outstanding as of December 31, 2023 258,558 $ 20.38 Granted during the period 169,002 16.05 Forfeited during the period (75,229) 17.26 Vested during the period (46,660) 20.36 Unvested RSU grants outstanding as of June 30, 2024 305,671 $ 18.76 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income Attributable to Common Shares, Weighted Average Common Shares and Effect of Dilutive Securities | The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net (loss) income per common share for the three and six months ended June 30, 2024 and 2023. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2024 2023 2024 2023 Numerator: Net (loss) income $ (2,306) $ (792) $ (1,254) $ 689 Net loss (income) attributable to noncontrolling interest 15 1 8 (8) Net (loss) income attributable to common shares, basic (2,291) (791) (1,246) 681 Net (loss) income attributable to noncontrolling interest (15) (1) (8) 8 Net (loss) income attributable to common shares, diluted $ (2,306) $ (792) $ (1,254) $ 689 Denominator: Weighted average common shares outstanding, basic 73,588,605 61,043,531 73,419,198 59,600,630 Effect of dilutive shares for diluted net income per common share: OP Units — — — 509,588 Unvested RSUs — — — 164,322 Unsettled shares under open forward equity contracts — — — 20,194 Weighted average common shares outstanding, diluted 73,588,605 61,043,531 73,419,198 60,294,734 Net (loss) income available to common stockholders per common share, basic $ (0.03) $ (0.01) $ (0.02) $ 0.01 Net (loss) income available to common stockholders per common share, diluted $ (0.03) $ (0.01) $ (0.02) $ 0.01 |
Organization and Description _2
Organization and Description of Business (Details) | Jun. 30, 2024 state property |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number owned or invested in properties | property | 649 |
Number of states in which entity operates | state | 45 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) property tenant | Jun. 30, 2023 property | Jun. 30, 2024 USD ($) property segment | Jun. 30, 2023 USD ($) property | Dec. 31, 2023 USD ($) property | |
Concentration Risk [Line Items] | |||||
OP Unit conversion ratio per share | 1 | 1 | |||
Depreciation and amortization | $ 36,084 | $ 30,795 | |||
Number of real estate properties held for sale | property | 25 | 25 | 23 | ||
Restricted cash | $ 500 | $ 500 | $ 11,500 | ||
Reportable segment | segment | 1 | ||||
Classified as held for sale | property | 5 | 6 | 5 | 6 | |
Measurement Input, Cap Rate | Minimum | |||||
Concentration Risk [Line Items] | |||||
Capitalization rate | 0.076 | 0.076 | |||
Measurement Input, Cap Rate | Maximum | |||||
Concentration Risk [Line Items] | |||||
Capitalization rate | 0.121 | 0.121 | |||
Real Estate | Level 3 | |||||
Concentration Risk [Line Items] | |||||
Adjusted carrying value | $ 1,500 | ||||
Real Estate | Level 3 | Minimum | |||||
Concentration Risk [Line Items] | |||||
Adjusted carrying value | $ 200 | $ 200 | |||
Real Estate | Level 3 | Maximum | |||||
Concentration Risk [Line Items] | |||||
Adjusted carrying value | 4,800 | $ 4,800 | |||
Held-for-Sale | Two Properties | |||||
Concentration Risk [Line Items] | |||||
Impairment expense | $ 1,900 | ||||
Classified as held for sale | tenant | 2 | ||||
Dollar General | Revenue Benchmark | Customer Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 11.30% | 0% | 11.50% | 0% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Provision for Impairment (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) property tenant | Jun. 30, 2023 USD ($) property | Jun. 30, 2024 USD ($) property | Jun. 30, 2023 USD ($) property | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Provisions for impairment | $ | $ 3,836 | $ 2,836 | $ 7,498 | $ 2,836 |
Number of properties | ||||
Classified as held for sale | 5 | 6 | 5 | 6 |
Disposed within the period | 1 | 0 | 7 | 0 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Classified as held for sale | 5 | 6 | 5 | 6 |
Held-for-Sale | Four Properties | ||||
Number of properties | ||||
Classified as held for sale | tenant | 4 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment expense | $ | $ 1,100 | |||
Classified as held for sale | tenant | 4 | |||
Held-for-Sale | Two Properties | ||||
Number of properties | ||||
Classified as held for sale | tenant | 2 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment expense | $ | $ 1,900 | |||
Classified as held for sale | tenant | 2 | |||
Held-for-Sale | Five Properties | ||||
Number of properties | ||||
Classified as held for sale | 5 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment expense | $ | $ 1,400 | |||
Classified as held for sale | 5 | |||
Held-for-Sale | Six Properties | ||||
Number of properties | ||||
Classified as held for sale | 6 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment expense | $ | $ 4,100 | |||
Classified as held for sale | 6 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Fair Value of Term Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Carrying Value | $ 726,167 | $ 607,853 |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Carrying Value | 731,284 | |
Unsecured Debt | 2028 Term Loan | Line of Credit | ||
Debt Instrument [Line Items] | ||
Carrying Value | 248,471 | 148,869 |
Estimated Fair Value | 250,909 | 150,666 |
Unsecured Debt | Prior Credit Agreement | Line of Credit | ||
Debt Instrument [Line Items] | ||
Carrying Value | 174,273 | 174,037 |
Estimated Fair Value | 175,493 | 175,641 |
Unsecured Debt | New Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Carrying Value | 199,126 | 199,006 |
Estimated Fair Value | $ 201,242 | $ 201,396 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Aug. 31, 2021 renewalOption | Jun. 30, 2024 USD ($) state | Dec. 31, 2023 USD ($) | |
Lessor, Lease, Description [Line Items] | |||
Number of states in which entity operates | state | 45 | ||
Remaining term of leases | 9 years 6 months | ||
Right-of-use asset | $ 3,677 | $ 3,866 | |
Operating lease liability | $ 4,882 | $ 5,104 | |
Corporate Office Space | |||
Lessor, Lease, Description [Line Items] | |||
Lease term | 8 years 1 month 6 days | ||
Renewal options | renewalOption | 2 | ||
Lease extension term | 5 years |
Leases - Disaggregation of Leas
Leases - Disaggregation of Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Rental revenue | ||||
Fixed lease income | $ 33,788 | $ 26,808 | $ 65,653 | $ 51,531 |
Variable lease income | 2,978 | 2,715 | 6,207 | 6,252 |
Other rental revenue: | ||||
Above/below market lease amortization, net | 287 | 377 | 573 | 789 |
Lease incentives | (189) | (193) | (380) | (392) |
Rental revenue (including reimbursable) | $ 36,864 | $ 29,707 | $ 72,053 | $ 58,180 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Base Rental Receipts (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | |
Remainder of 2024 | $ 66,247 |
2025 | 132,701 |
2026 | 130,639 |
2027 | 127,206 |
2028 | 120,591 |
Thereafter | 736,410 |
Total Future Minimum Base Rental Receipts | $ 1,313,794 |
Real Estate Investments - Narra
Real Estate Investments - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) property state | Jun. 30, 2023 USD ($) property | Jun. 30, 2024 USD ($) property state | Jun. 30, 2023 USD ($) property | Dec. 31, 2023 USD ($) property | |
Real Estate [Line Items] | |||||
Number owned or invested in properties | property | 649 | 649 | |||
Number of properties under development | property | 12 | 12 | |||
Gross real estate investment portfolio | $ 2,000,000 | $ 2,000,000 | |||
Number of states in which entity operates | state | 45 | 45 | |||
Number of properties acquired | property | 46 | 48 | |||
Payments to acquire real estate held-for-investment | $ 190,764 | $ 163,934 | |||
Acquisition fees incurred | $ 1,800 | 1,700 | |||
Property developments under construction | property | 8 | ||||
Investment in real estate development project | $ 12,000 | ||||
Land acquisitions | property | 20 | ||||
Properties developed | property | 14 | ||||
Interest expense capitalized (less than) | $ 226 | $ 150 | $ 579 | 284 | |
Payments to acquire and develop real estate | $ 29,996 | $ 19,426 | |||
Disposed within the period | property | 1 | 0 | 7 | 0 | |
Proceeds from sale of real estate | $ 32,542 | $ 19,299 | |||
Gain on sales of real estate, net | $ 8 | $ 615 | 1,006 | 296 | |
Mortgage loans receivable, net | $ 129,941 | 129,941 | $ 114,472 | ||
Completed development transferred | $ 35,300 | ||||
Number of real estate properties held for sale | property | 25 | 25 | 23 | ||
Provisions for impairment | $ 3,836 | $ 2,836 | $ 7,498 | $ 2,836 | |
2021 Acquisitions | |||||
Real Estate [Line Items] | |||||
Number of properties acquired | property | 18 | 28 | |||
2022 Acquisitions | |||||
Real Estate [Line Items] | |||||
Payments to acquire real estate held-for-investment | $ 95,600 | $ 96,200 | |||
Capitalized acquisition costs | $ 600 | $ 1,000 | |||
Texas | |||||
Real Estate [Line Items] | |||||
Percentage of total gross real estate investment | 9% | 9% | |||
Illinois | |||||
Real Estate [Line Items] | |||||
Percentage of total gross real estate investment | 10.60% | 10.60% | |||
Two Properties | |||||
Real Estate [Line Items] | |||||
Property developments under construction | property | 2 | ||||
Combined initial purchase price | $ 1,200 | ||||
Disposed within the period | property | 6 | 2 | |||
Proceeds from sale of real estate | $ 12,100 | $ 3,800 | |||
Gain on sales of real estate, net | $ 100 | 600 | |||
Three Properties | |||||
Real Estate [Line Items] | |||||
Payments to acquire real estate held-for-investment | $ 17,700 | ||||
Disposed within the period | property | 18 | 10 | |||
Proceeds from sale of real estate | $ 32,500 | $ 19,300 | |||
Gain on sales of real estate, net | $ 1,000 | $ 300 | |||
Six Properties | |||||
Real Estate [Line Items] | |||||
Impaired properties | property | 12 | 6 | 23 | 6 | |
Provisions for impairment | $ 3,836 | $ 7,500 | |||
One Property | |||||
Real Estate [Line Items] | |||||
Payments to acquire real estate held-for-investment | $ 22,200 | ||||
Payments to acquire real estate | 11,900 | ||||
Provisions for impairment | $ 2,836 | $ 2,800 | |||
Four Properties | |||||
Real Estate [Line Items] | |||||
Property developments under construction | property | 4 | ||||
Investment in real estate development project | $ 23,000 | ||||
Payments to acquire real estate | $ 2,000 | ||||
Properties developed | property | 2 | ||||
Completed development transferred | $ 14,800 |
Real Estate Investments - Alloc
Real Estate Investments - Allocation of Purchase Price Paid for Completed Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Real Estate [Line Items] | ||||
Purchase price (including acquisition costs) | $ 95,611 | $ 96,217 | $ 190,764 | $ 163,934 |
In-place leases | ||||
Real Estate [Line Items] | ||||
Finite-lived intangible assets acquired | 4,479 | 11,399 | 15,772 | 17,809 |
Above-market leases | ||||
Real Estate [Line Items] | ||||
Finite-lived intangible assets acquired | 0 | 1,543 | 0 | 1,543 |
Land | ||||
Real Estate [Line Items] | ||||
Property, plant and equipment, additions | 28,264 | 19,748 | 44,872 | 34,052 |
Buildings | ||||
Real Estate [Line Items] | ||||
Property, plant and equipment, additions | 55,508 | 56,869 | 114,887 | 100,002 |
Site improvements | ||||
Real Estate [Line Items] | ||||
Property, plant and equipment, additions | 7,001 | 5,490 | 13,429 | 8,969 |
Tenant improvements | ||||
Real Estate [Line Items] | ||||
Property, plant and equipment, additions | $ 359 | $ 1,168 | $ 1,804 | $ 1,559 |
Real Estate Investments - Sched
Real Estate Investments - Schedule of Mortgage Loans Receivable (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) property | Dec. 31, 2023 USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Total | $ 130,174 | $ 114,530 |
Unamortized loan origination costs and fees, net | 20 | 58 |
Unamortized discount | (252) | (116) |
Total mortgage loans receivable, net | $ 129,941 | 114,472 |
Mortgage Receivable Due January 8, 2025 A | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 1 | |
Effective Interest Rate | 7.60% | |
Stated Interest Rate | 7.50% | |
Total | $ 43,612 | 43,612 |
Mortgage Receivable Due March 10, 2026 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 46 | |
Effective Interest Rate | 9.55% | |
Stated Interest Rate | 9.55% | |
Total | $ 41,940 | 41,940 |
Mortgage Receivable Due April 10, 2026 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 3 | |
Effective Interest Rate | 8.11% | |
Stated Interest Rate | 6.89% | |
Total | $ 4,132 | 4,132 |
Mortgage Receivable Due April 10, 2026 | Maximum | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Stated Interest Rate | 15% | |
Mortgage Receivable Due June 10, 2025 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 9 | |
Effective Interest Rate | 7.59% | |
Stated Interest Rate | 7.59% | |
Total | $ 14,024 | 14,024 |
Mortgage Receivable Due June 10, 2025 | Maximum | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Stated Interest Rate | 15% | |
Mortgage Receivable Due December 29, 2024 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 1 | |
Effective Interest Rate | 7.73% | |
Stated Interest Rate | 8.50% | |
Total | $ 660 | 660 |
Mortgage Receivable Due January 8, 2025 B | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 1 | |
Effective Interest Rate | 9.32% | |
Stated Interest Rate | 7.50% | |
Total | $ 3,231 | 3,246 |
Mortgage Receivable Due June 18, 2025 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 12 | |
Effective Interest Rate | 8.80% | |
Stated Interest Rate | 10.25% | |
Total | $ 16,823 | 5,007 |
Mortgage Receivable Due December 22, 2024 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 2 | |
Effective Interest Rate | 14.10% | |
Stated Interest Rate | 10.25% | |
Total | $ 4,149 | 1,909 |
Mortgage Receivable Due April 26, 2025 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 1 | |
Effective Interest Rate | 10.25% | |
Stated Interest Rate | 10.25% | |
Total | $ 819 | 0 |
Mortgage Receivable Due May 15, 2025 | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of Secured Properties | property | 1 | |
Effective Interest Rate | 10.25% | |
Stated Interest Rate | 10.25% | |
Total | $ 784 | $ 0 |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities - Summary of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets: | ||
Gross Carrying Amount | $ 222,103 | $ 212,221 |
Accumulated Amortization | (59,830) | (50,867) |
Net Carrying Amount | 162,273 | 161,354 |
Liabilities: | ||
Gross Carrying Amount | 33,062 | 33,196 |
Accumulated Amortization | (9,186) | (7,843) |
Net Carrying Amount | 23,876 | 25,353 |
In-place leases | ||
Assets: | ||
Gross Carrying Amount | 191,928 | 181,564 |
Accumulated Amortization | (53,058) | (45,210) |
Net Carrying Amount | 138,870 | 136,354 |
Above-market leases | ||
Assets: | ||
Gross Carrying Amount | 21,634 | 21,661 |
Accumulated Amortization | (5,163) | (4,361) |
Net Carrying Amount | 16,471 | 17,300 |
Lease incentives | ||
Assets: | ||
Gross Carrying Amount | 8,541 | 8,996 |
Accumulated Amortization | (1,609) | (1,296) |
Net Carrying Amount | $ 6,932 | $ 7,700 |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities - Weighted Average Amortization Period for Intangible Assets and Liabilities (Details) - Weighted Average | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period, below-market leases | 10 years 6 months | 10 years 10 months 24 days |
In-place leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period, intangible assets | 8 years 10 months 24 days | 8 years 9 months 18 days |
Above-market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period, intangible assets | 11 years 9 months 18 days | 12 years 2 months 12 days |
Lease incentives | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period, intangible assets | 10 years 6 months | 11 years 1 month 6 days |
Intangible Assets and Liabili_5
Intangible Assets and Liabilities - Amortization of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Net adjustment to rental revenue: | ||||
Below-market lease liabilities | $ 380 | $ 768 | $ 761 | $ 1,551 |
Net adjustment to rental revenue | 98 | 184 | 193 | 397 |
In-place leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization: | 5,196 | 4,809 | 10,071 | 9,479 |
Above-market leases | ||||
Net adjustment to rental revenue: | ||||
Above-market lease assets | (93) | (391) | (188) | (762) |
Lease incentives | ||||
Net adjustment to rental revenue: | ||||
Above-market lease assets | $ (189) | $ (193) | $ (380) | $ (392) |
Intangible Assets and Liabili_6
Intangible Assets and Liabilities - Projected Amortization of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Below-market lease liabilities | ||
Remainder of 2024 | $ 1,394 | |
2025 | 2,771 | |
2026 | 2,681 | |
2027 | 2,610 | |
2028 | 2,478 | |
Thereafter | 11,942 | |
Net Carrying Amount | 23,876 | $ 25,353 |
Net adjustment to rental revenue | ||
Remainder of 2024 | 191 | |
2025 | 365 | |
2026 | 298 | |
2027 | 347 | |
2028 | 290 | |
Thereafter | (1,018) | |
Total | 473 | |
In-place leases | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2024 | 10,388 | |
2025 | 20,525 | |
2026 | 19,319 | |
2027 | 17,352 | |
2028 | 14,548 | |
Thereafter | 56,738 | |
Total | 138,870 | |
Above-market leases | ||
Above-market lease assets | ||
Remainder of 2024 | (828) | |
2025 | (1,655) | |
2026 | (1,632) | |
2027 | (1,568) | |
2028 | (1,523) | |
Thereafter | (9,265) | |
Total | (16,471) | |
Lease incentives | ||
Above-market lease assets | ||
Remainder of 2024 | (375) | |
2025 | (751) | |
2026 | (751) | |
2027 | (695) | |
2028 | (665) | |
Thereafter | (3,695) | |
Total | $ (6,932) |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) $ in Thousands | 6 Months Ended | |||||||||
Mar. 01, 2024 USD ($) | Jun. 30, 2024 USD ($) derivative | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Nov. 28, 2023 | Jul. 03, 2023 | Jan. 27, 2023 derivative | Jan. 26, 2023 derivative | Sep. 01, 2022 | Aug. 11, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Total debt | $ 731,284 | $ 613,361 | ||||||||
Unamortized discount and debt issuance costs | (3,546) | (3,566) | ||||||||
Unamortized deferred financing costs, net | (1,571) | (1,942) | ||||||||
Long-term debt | 726,167 | 607,853 | ||||||||
Interest rate swap agreements | derivative | 4 | 4 | ||||||||
Proceeds under revolving credit facilities | 190,000 | $ 221,000 | ||||||||
Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 731,284 | |||||||||
Line of Credit | Revolver | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective Interest Rate | 6.43% | |||||||||
Total debt | $ 98,000 | 80,000 | ||||||||
Prior Credit Agreement | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized deferred financing costs, net | $ (500) | |||||||||
Prior Credit Agreement | Line of Credit | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 174,273 | 174,037 | ||||||||
New Credit Facility | Line of Credit | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective Interest Rate | 3.88% | |||||||||
Long-term debt | $ 199,126 | 199,006 | ||||||||
Mortgage Note Payable | Mortgages | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective Interest Rate | 4.53% | |||||||||
Total debt | $ 8,284 | 8,361 | ||||||||
2027 Term Loan | Line of Credit | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective Interest Rate | 3.12% | |||||||||
Total debt | $ 175,000 | 175,000 | ||||||||
Fixed rate SOFR swap | 1.87% | 0.12% | ||||||||
2027 Term Loan | Line of Credit | Unsecured Debt | Interest rate swaps | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate swap agreements | derivative | 5 | |||||||||
2027 Term Loan | Line of Credit | Unsecured Debt | Interest rate swaps | Period One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed rate SOFR swap | 1.87% | |||||||||
2027 Term Loan | Line of Credit | Unsecured Debt | Interest rate swaps | Period Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed rate SOFR swap | 2.40% | |||||||||
2027 Term Loan | Line of Credit | SOFR adjustment rate | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 0.10% | |||||||||
2027 Term Loan | Line of Credit | SOFR margin | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 1.15% | |||||||||
2028 Term Loan | Line of Credit | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective Interest Rate | 3.88% | |||||||||
Total debt | $ 200,000 | 200,000 | ||||||||
Long-term debt | $ 248,471 | 148,869 | ||||||||
Fixed rate SOFR swap | 2.63% | |||||||||
2028 Term Loan | Line of Credit | Unsecured Debt | Interest rate swaps | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate swap agreements | derivative | 3 | |||||||||
2028 Term Loan | Line of Credit | SOFR adjustment rate | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 0.10% | |||||||||
2028 Term Loan | Line of Credit | SOFR margin | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 1.15% | |||||||||
2029 Term Loan | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fixed rate SOFR swap | 3.74% | |||||||||
2029 Term Loan | Line of Credit | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective Interest Rate | 4.99% | |||||||||
Total debt | $ 250,000 | $ 150,000 | ||||||||
Proceeds under revolving credit facilities | $ 100,000 | |||||||||
2029 Term Loan | Line of Credit | Unsecured Debt | Interest rate swaps | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate swap agreements | derivative | 4 | |||||||||
2029 Term Loan | Line of Credit | SOFR adjustment rate | Revolver | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 0.10% | |||||||||
2029 Term Loan | Line of Credit | SOFR adjustment rate | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 0.10% | |||||||||
2029 Term Loan | Line of Credit | SOFR margin | Revolver | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 1% | |||||||||
2029 Term Loan | Line of Credit | Daily SOFR | Revolver | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 5.34% | |||||||||
2029 Term Loan | Line of Credit | SOFR adjustment | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 0.10% | |||||||||
2029 Term Loan | Line of Credit | SOFR | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
One-month LIBOR | 1.15% |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||||||||
Mar. 01, 2024 USD ($) | Jul. 03, 2023 USD ($) tenant | Jun. 15, 2023 USD ($) | Aug. 11, 2022 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2019 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Amortization of deferred financing costs | $ 186,000 | $ 186,000 | $ 423,000 | $ 371,000 | ||||||
Interest expense capitalized (less than) | 226,000 | 150,000 | 579,000 | 284,000 | ||||||
Total debt | 731,284,000 | 731,284,000 | $ 613,361,000 | |||||||
Unamortized deferred financing costs | 1,571,000 | 1,571,000 | 1,942,000 | |||||||
Proceeds under revolving credit facilities | 190,000,000 | 221,000,000 | ||||||||
Revolver | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total debt | $ 98,000,000 | $ 98,000,000 | 80,000,000 | |||||||
Effective Interest Rate | 6.43% | 6.43% | ||||||||
Facility fees | $ 200,000 | $ 100,000 | $ 300,000 | $ 300,000 | ||||||
Credit Facility | Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Weighted average effective interest rate (as a percent) | 6.66% | 6.41% | 6.69% | 6.09% | ||||||
Credit Facility | Revolver | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Weighted average effective interest rate (as a percent) | 6.49% | 5.94% | 6.51% | 5.92% | ||||||
Prior Credit Agreement | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized deferred financing costs | $ 500,000 | |||||||||
Prior Credit Agreement | Unsecured Debt | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 175,000,000 | |||||||||
2026 Term Loan | Unsecured Debt | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 175,000,000 | |||||||||
Debt instrument, extension term | 1 year | |||||||||
2026 Term Loan | Unsecured Debt | Minimum | Base Rate | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.15% | |||||||||
2026 Term Loan | Unsecured Debt | Minimum | Base Rate | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0% | |||||||||
2026 Term Loan | Unsecured Debt | Minimum | SOFR margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.15% | |||||||||
2026 Term Loan | Unsecured Debt | Minimum | SOFR margin | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.80% | |||||||||
2026 Term Loan | Unsecured Debt | Maximum | Base Rate | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.60% | |||||||||
2026 Term Loan | Unsecured Debt | Maximum | Base Rate | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.60% | |||||||||
2026 Term Loan | Unsecured Debt | Maximum | SOFR margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.60% | |||||||||
2026 Term Loan | Unsecured Debt | Maximum | SOFR margin | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.60% | |||||||||
Mortgage Note Payable | Mortgages | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total debt | $ 8,284,000 | $ 8,284,000 | 8,361,000 | |||||||
Effective Interest Rate | 4.53% | 4.53% | ||||||||
Deferred financing costs, gross (less than) | $ 100,000 | $ 100,000 | ||||||||
Mortgages | 8,300,000 | 8,300,000 | ||||||||
Collateral | 12,400,000 | 12,400,000 | ||||||||
Unamortized discount | 600,000 | 600,000 | ||||||||
2029 Term Loan | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Deferred financing costs, gross (less than) | $ 1,400,000 | |||||||||
Facility fees | $ 900,000 | |||||||||
Fixed rate SOFR swap | 3.74% | |||||||||
2029 Term Loan | Unsecured Debt | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total debt | $ 250,000,000 | $ 250,000,000 | $ 150,000,000 | |||||||
Effective Interest Rate | 4.99% | 4.99% | ||||||||
Proceeds under revolving credit facilities | $ 100,000,000 | |||||||||
2029 Term Loan | Unsecured Debt | Line of Credit | Period One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Extension option | tenant | 2 | |||||||||
Extension option period | 1 year | |||||||||
2029 Term Loan | Unsecured Debt | Line of Credit | Period Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Extension option | tenant | 1 | |||||||||
Extension option period | 6 months | |||||||||
2029 Term Loan | Unsecured Debt | SOFR adjustment | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.10% | |||||||||
2029 Term Loan | Unsecured Debt | SOFR | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 5.34% | |||||||||
2029 Term Loan | Unsecured Debt | SOFR plus margin | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.15% | |||||||||
New Credit Facility | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Deferred financing costs, gross (less than) | 3,800,000 | |||||||||
New Credit Facility | Revolver | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 400,000,000 | |||||||||
Debt instrument, extension term | 1 year | |||||||||
Increase in borrowing capacity | $ 1,000,000,000 | |||||||||
Rate reduction | 0.025% | |||||||||
Deferred financing costs, gross (less than) | $ 2,400,000 | |||||||||
Available increase limit | $ 400,000,000 | |||||||||
New Credit Facility | Revolver | SOFR adjustment | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.10% | |||||||||
New Credit Facility | Revolver | SOFR adjustment | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.10% | |||||||||
New Credit Facility | Revolver | Minimum | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolver facility fee (as a percent) | 0.15% | |||||||||
New Credit Facility | Revolver | Minimum | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolver facility fee (as a percent) | 0.125% | |||||||||
New Credit Facility | Revolver | Minimum | Base Rate | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0% | |||||||||
New Credit Facility | Revolver | Minimum | Base Rate | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0% | |||||||||
New Credit Facility | Revolver | Minimum | SOFR margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1% | |||||||||
New Credit Facility | Revolver | Minimum | SOFR margin | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.725% | |||||||||
New Credit Facility | Revolver | Maximum | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolver facility fee (as a percent) | 0.30% | |||||||||
New Credit Facility | Revolver | Maximum | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revolver facility fee (as a percent) | 0.30% | |||||||||
New Credit Facility | Revolver | Maximum | Base Rate | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.45% | |||||||||
New Credit Facility | Revolver | Maximum | Base Rate | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.40% | |||||||||
New Credit Facility | Revolver | Maximum | SOFR margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.45% | |||||||||
New Credit Facility | Revolver | Maximum | SOFR margin | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.40% | |||||||||
New Credit Facility | Unsecured Debt | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 200,000,000 | |||||||||
Debt instrument, extension term | 1 year | |||||||||
Effective Interest Rate | 3.88% | 3.88% | ||||||||
Deferred financing costs, gross (less than) | $ 1,300,000 | |||||||||
New Credit Facility | Unsecured Debt | SOFR adjustment | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.10% | |||||||||
New Credit Facility | Unsecured Debt | SOFR adjustment | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.10% | |||||||||
New Credit Facility | Unsecured Debt | Minimum | Base Rate | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.15% | |||||||||
New Credit Facility | Unsecured Debt | Minimum | Base Rate | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0% | |||||||||
New Credit Facility | Unsecured Debt | Minimum | SOFR margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.15% | |||||||||
New Credit Facility | Unsecured Debt | Minimum | SOFR margin | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.80% | |||||||||
New Credit Facility | Unsecured Debt | Maximum | Base Rate | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.60% | |||||||||
New Credit Facility | Unsecured Debt | Maximum | Base Rate | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.60% | |||||||||
New Credit Facility | Unsecured Debt | Maximum | SOFR margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.60% | |||||||||
New Credit Facility | Unsecured Debt | Maximum | SOFR margin | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.60% | |||||||||
2029 Term Loan Agreement | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||||
Increase in borrowing capacity | 400,000,000 | |||||||||
Proceeds under revolving credit facilities | $ 150,000,000 | |||||||||
All-in fixed interest rate | 4.99% | |||||||||
Fixed rate SOFR swap | 3.74% | |||||||||
Credit spread adjustment | 0.10% | |||||||||
Borrowing spread | 1.15% | |||||||||
Interest rate reduction (up to) | 0.025% | |||||||||
2029 Term Loan Agreement | Minimum | SOFR | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.15% | |||||||||
2029 Term Loan Agreement | Minimum | SOFR | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.80% | |||||||||
2029 Term Loan Agreement | Minimum | SOFR plus margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.15% | |||||||||
2029 Term Loan Agreement | Maximum | SOFR | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.60% | |||||||||
2029 Term Loan Agreement | Maximum | SOFR | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 1.60% | |||||||||
2029 Term Loan Agreement | Maximum | SOFR plus margin | Line of Credit | Prior To Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.60% | |||||||||
2029 Term Loan Agreement | Maximum | SOFR base | Line of Credit | After Investment Grade | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Variable rate | 0.60% |
Debt - Schedule of Maturities (
Debt - Schedule of Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 726,167 | $ 607,853 |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | 83 | |
2025 | 170 | |
2026 | 523,178 | |
2027 | 7,853 | |
2028 | 200,000 | |
Long-term debt | 731,284 | |
Unsecured Debt | Scheduled Principal | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | 83 | |
2025 | 170 | |
2026 | 178 | |
2027 | 170 | |
2028 | 0 | |
Long-term debt | 601 | |
Unsecured Debt | Balloon Payment | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | 0 | |
2025 | 0 | |
2026 | 523,000 | |
2027 | 7,683 | |
2028 | 200,000 | |
Long-term debt | $ 730,683 |
Debt - Components of Interest E
Debt - Components of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Debt Instrument [Line Items] | ||||
Amortization of deferred financing costs | $ 186 | $ 186 | $ 423 | $ 371 |
Amortization of debt discount, net | 401 | 150 | 749 | 301 |
Amortization of deferred gains on interest rate swaps | 1,958 | 0 | ||
Capitalized interest | (226) | (150) | (579) | (284) |
Total interest expense, net | 7,604 | 5,521 | 13,784 | 9,465 |
Mortgages | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 95 | 100 | 190 | 193 |
Revolver | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 1,636 | 2,567 | 2,759 | 3,716 |
Facility fees | 200 | 100 | 300 | 300 |
Unsecured Debt | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 6,491 | 2,668 | 12,200 | 5,168 |
Amortization of deferred gains on interest rate swaps | $ (979) | $ 0 | $ (1,958) | $ 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) $ in Millions | 6 Months Ended | ||||||
Jun. 30, 2024 USD ($) derivative | Dec. 24, 2024 | Nov. 28, 2023 | Jul. 03, 2023 | Jan. 27, 2023 derivative | Jan. 26, 2023 derivative | Sep. 01, 2022 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Interest rate swap agreements | 4 | 4 | |||||
2029 Term Loan | Line of Credit | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Fixed rate SOFR swap | 3.74% | ||||||
2029 Term Loan | Line of Credit | SOFR | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 5.34% | ||||||
2029 Term Loan | Line of Credit | SOFR adjustment rate | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 0.10% | ||||||
2029 Term Loan | Line of Credit | SOFR plus margin | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 1.15% | ||||||
2028 Term Loan | Line of Credit | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Fixed rate SOFR swap | 2.63% | ||||||
2028 Term Loan | Line of Credit | SOFR | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Weighted average effective interest rate (as a percent) | 5.33% | ||||||
2028 Term Loan | Line of Credit | SOFR adjustment rate | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 0.10% | ||||||
2028 Term Loan | Line of Credit | SOFR margin | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 1.15% | ||||||
2027 Term Loan | Line of Credit | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Fixed rate SOFR swap | 1.87% | 0.12% | |||||
2027 Term Loan | Line of Credit | Unsecured Debt | Forecast | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Fixed rate SOFR swap | 2.40% | ||||||
2027 Term Loan | Line of Credit | SOFR | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 5.31% | ||||||
2027 Term Loan | Line of Credit | SOFR adjustment rate | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 0.10% | ||||||
2027 Term Loan | Line of Credit | SOFR margin | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 1.15% | ||||||
2027 Term Loan | Line of Credit | SOFR plus margin | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Variable rate | 1.15% | ||||||
Interest rate swaps | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Amount estimated to be reclassified as increase to interest expense | $ | $ 12.6 | ||||||
Interest rate swaps | 2029 Term Loan | Line of Credit | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Interest rate swap agreements | 4 | ||||||
Interest rate swaps | 2028 Term Loan | Line of Credit | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Interest rate swap agreements | 3 | ||||||
Interest rate swaps | 2027 Term Loan | Line of Credit | Unsecured Debt | |||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||
Interest rate swap agreements | 5 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Interest Rate Derivatives (Details) - Interest rate swaps $ in Thousands | Jun. 30, 2024 USD ($) instrument | Dec. 31, 2023 USD ($) instrument |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Number of Instruments | instrument | 12 | 12 |
Notional | $ | $ 650,000 | $ 650,000 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Fair Value of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 22,035 | $ 14,442 |
Derivative Liabilities | 0 | 3,073 |
Interest rate swaps | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 22,035 | 14,442 |
Derivative Liabilities | $ 0 | $ 3,073 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Effect of Interest Rate Swaps (Details) - Interest rate swaps - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | $ 4,446 | $ 9,714 | $ 18,207 | $ 6,572 |
Interest Expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | $ 4,866 | $ 3,326 | $ 9,499 | $ 6,163 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Schedule of Derivative Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fair value of interest rate swaps | $ 22,035 | $ 14,442 |
Derivative Liabilities | 0 | 3,073 |
Recurring | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fair value of interest rate swaps | 22,035 | 14,442 |
Derivative Liabilities | 3,073 | |
Recurring | Level 1 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fair value of interest rate swaps | 0 | 0 |
Derivative Liabilities | 0 | |
Recurring | Level 2 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fair value of interest rate swaps | 22,035 | 14,442 |
Derivative Liabilities | 3,073 | |
Recurring | Level 3 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fair value of interest rate swaps | $ 0 | 0 |
Derivative Liabilities | $ 0 |
Supplemental Detail for Certa_3
Supplemental Detail for Certain Components of the Condensed Consolidated Balance Sheets - Schedule of Other Assets, net (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets, net | Other assets, net |
Accounts receivable, net | $ 11,143 | $ 10,074 |
Deferred rent receivable | 9,469 | 7,744 |
Prepaid assets | 3,834 | 1,387 |
Earnest money deposits | 464 | 450 |
Fair value of interest rate swaps | 22,035 | 14,442 |
Deferred offering costs | 1,244 | 1,031 |
Deferred financing costs, net | 1,571 | 2,724 |
Right-of-use asset | 3,677 | 3,866 |
Leasehold improvements and other corporate assets, net | 1,575 | 1,723 |
Interest receivable | 2,542 | 1,397 |
Other assets, net | 6,510 | 4,499 |
Other assets, net | $ 64,064 | $ 49,337 |
Supplemental Detail for Certa_4
Supplemental Detail for Certain Components of the Condensed Consolidated Balance Sheets - Schedule of Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accounts payable, accrued expenses and other liabilities | Accounts payable, accrued expenses and other liabilities |
Accrued expenses | $ 8,753 | $ 8,826 |
Accrued bonus | 736 | 2,575 |
Prepaid rent | 3,090 | 3,896 |
Operating lease liability | 4,882 | 5,104 |
Accrued interest | 3,258 | 2,921 |
Deferred rent | 3,998 | 3,257 |
Accounts payable | 812 | 4,691 |
Fair value of interest rate swaps | 0 | 3,073 |
Other liabilities | 1,839 | 2,155 |
Accounts payable, accrued expenses and other liabilities | $ 27,368 | $ 36,498 |
Shareholders_ Equity, Partner_3
Shareholders’ Equity, Partners’ Capital and Preferred Equity - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||
Jun. 26, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 29, 2024 | Jan. 31, 2024 | Dec. 31, 2023 | Oct. 25, 2023 | Sep. 14, 2023 | Sep. 01, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Issuance of common stock in public offerings, net | $ 65,324,000 | $ 167,439,000 | ||||||||||||
Payments of offering costs | 614,000 | 185,000 | ||||||||||||
Payment of OP unit distributions | $ 188,000 | $ 203,000 | ||||||||||||
OP Unit conversion ratio per share | 1 | 1 | ||||||||||||
Restricted Stock Units (RSUs) | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Forfeited during period (in shares) | 71,000 | 18,000 | ||||||||||||
Forfeited during period | $ 1,200,000 | $ 400,000 | ||||||||||||
Netstreit, L.P. (The Operating Partnership) | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Non-controlling interest holders ownership | 0.60% | 0.60% | 0.70% | |||||||||||
Public Offering | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Number of shares sold (in shares) | 11,040,000 | |||||||||||||
IPO - Shares From Existing Shareholders | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Units converted (in shares) | 42,240 | 5,694 | ||||||||||||
IPO - Shares From Existing Shareholders | Common stock | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Units converted (in shares) | 35,121 | 7,119 | 5,694 | |||||||||||
August 2022 Follow-On Offering | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Shares sold (in dollars per share) | $ 18 | |||||||||||||
Common stock | ATM Program | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
At-the-market sale of equity program | $ 250,000,000 | |||||||||||||
Number of shares sold (in shares) | 1,364,815 | 146,745 | ||||||||||||
Shares sold (in dollars per share) | $ 17.53 | $ 20.22 | $ 17.53 | |||||||||||
Issuance of common stock in public offerings, net | $ 23,400,000 | $ 2,900,000 | ||||||||||||
Payments of offering costs | $ 300,000 | $ 100,000 | ||||||||||||
Common stock | 2021 ATM Program | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Number of shares sold (in shares) | 4,000,000 | |||||||||||||
Shares sold (in dollars per share) | $ 16.43 | $ 16.44 | $ 16.44 | |||||||||||
Issuance of common stock in public offerings, net | $ 65,300,000 | |||||||||||||
Payments of offering costs | $ 700,000 | |||||||||||||
Shares remaining unsettled (in shares) | 1,983,711 | 1,983,711 | 7,500,000 | |||||||||||
Common stock | 2023 ATM Program | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
At-the-market sale of equity program | $ 300,000,000 | |||||||||||||
Shares sold (in dollars per share) | $ 17.63 | |||||||||||||
Shares remaining unsettled (in shares) | 107,500 | 107,500 | 1,635,600 | |||||||||||
Available for future issuances | $ 222,700,000 | $ 222,700,000 |
Shareholders_ Equity, Partner_4
Shareholders’ Equity, Partners’ Capital and Preferred Equity - Schedule of ATM Program Activity (Details) - Common stock - USD ($) | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 26, 2024 | Apr. 29, 2024 | Mar. 28, 2024 | Sep. 14, 2023 | |
2021 ATM Program | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Maximum Sales Authorization | $ 250,000,000 | ||||
Gross Sales | $ 216,391,000 | ||||
Shares remaining unsettled (in shares) | 1,983,711 | 7,500,000 | |||
Shares sold (in dollars per share) | $ 16.44 | $ 16.43 | |||
2023 ATM Program | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Maximum Sales Authorization | $ 300,000,000 | ||||
Gross Sales | $ 77,323,000 | ||||
Shares remaining unsettled (in shares) | 107,500 | 1,635,600 | |||
Shares sold (in dollars per share) | $ 17.63 | ||||
Forward Sale Agreement | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares remaining unsettled (in shares) | 1,743,100 | ||||
Shares sold (in dollars per share) | $ 17.54 | $ 18.29 |
Stockholders_ Equity, Partners_
Stockholders’ Equity, Partners’ Capital and Preferred Equity - Common Stock Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |||||||||
Jun. 15, 2023 | Apr. 25, 2023 | Mar. 30, 2023 | Feb. 21, 2023 | Jun. 15, 2022 | Apr. 26, 2022 | Mar. 30, 2022 | Feb. 22, 2022 | Jun. 30, 2024 | Jun. 30, 2023 | |
Equity [Abstract] | ||||||||||
Cash dividend paid (in dollars per share) | $ 0.205 | $ 0.205 | $ 0.200 | $ 0.200 | $ 0.410 | $ 0.400 | ||||
Cash dividend declared (in dollars per share) | $ 0.205 | $ 0.205 | $ 0.200 | $ 0.200 | $ 0.400 | |||||
Dividends, common stock, cash | $ 15,042 | $ 15,031 | $ 12,173 | $ 11,650 | $ 30,073 | $ 23,823 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2021 | Aug. 31, 2020 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares reserved for issuance | 2,094,976 | 2,094,976 | |||||
Stock-based compensation expense | $ 1,500 | $ 1,300 | $ 3,300 | $ 2,300 | |||
Catch-up adjustment | $ 1,400 | ||||||
Stock-based compensation expense | 3,281 | $ 2,279 | |||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 100 | ||||||
Restricted Stock Units (RSUs) | The Program | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 100 | 200 | |||||
Total unrecognized compensation cost | 1,700 | $ 1,700 | |||||
Restricted Stock Units (RSUs) | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 1 year | ||||||
Restricted Stock Units (RSUs) | Minimum | Alignment Of Interest Program | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 1 year | ||||||
Restricted Stock Units (RSUs) | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 5 years | ||||||
Restricted Stock Units (RSUs) | Maximum | Alignment Of Interest Program | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Performance-Based RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation cost | 100 | $ 100 | |||||
Weighted average remaining contractual term | 6 months | ||||||
Granted during the period (in dollars per share) | $ 0 | ||||||
Service-Based RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 900 | $ 1,900 | |||||
Total unrecognized compensation cost | 4,800 | $ 4,800 | $ 3,400 | ||||
Weighted average remaining contractual term | 2 years 1 month 6 days | ||||||
Granted during the period (in dollars per share) | $ 17.33 | ||||||
Service-Based RSUs | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 1 year | ||||||
Service-Based RSUs | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 5 years | ||||||
Market-Based Awards | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 500 | $ 1,100 | |||||
Award vesting period | 3 years | ||||||
Total unrecognized compensation cost | $ 3,400 | $ 3,400 | $ 2,100 | ||||
Weighted average remaining contractual term | 2 years 2 months 12 days | ||||||
Expected volatility (as a percent) | 24.90% | ||||||
Minimum expected volatility (as a percent) | 19.90% | ||||||
Maximum expected volatility (as a percent) | 49.40% | ||||||
Weighted average expected volatility (as a percent) | 27.10% | ||||||
Risk free interest rate (as a percent) | 4.41% | ||||||
Targeted TSR (in dollars per share) | $ 18.03 | ||||||
Absolute TSR (in dollars per share) | 14.56 | ||||||
Weighted average grant day value (in dollars per share) | 15.77 | ||||||
Granted during the period (in dollars per share) | $ 16.05 | ||||||
Market-Based Awards | 40% vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Award vesting rights (as a percent) | 40% | ||||||
Market-Based Awards | 60% vesting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights (as a percent) | 60% |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Restricted Stock Unit Activity (Details) | 6 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Performance-Based RSUs | |
Unvested Restricted Stock Grants Outstanding | |
Beginning balance (in shares) | shares | 30,379 |
Forfeited during the period (in shares) | shares | 0 |
Vesting during the period (in shares) | shares | 0 |
Granted during the period (in shares) | shares | 0 |
Ending balance (in shares) | shares | 30,379 |
Weighted Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 19.75 |
Forfeited during the period (in dollars per share) | $ / shares | 0 |
Vesting during the period (in dollars per share) | $ / shares | 0 |
Granted during the period (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 19.75 |
Service-Based RSUs | |
Unvested Restricted Stock Grants Outstanding | |
Beginning balance (in shares) | shares | 298,108 |
Forfeited during the period (in shares) | shares | (1,034) |
Vesting during the period (in shares) | shares | (153,047) |
Granted during the period (in shares) | shares | 200,140 |
Ending balance (in shares) | shares | 344,167 |
Weighted Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 19.79 |
Forfeited during the period (in dollars per share) | $ / shares | 18.10 |
Vesting during the period (in dollars per share) | $ / shares | 19.72 |
Granted during the period (in dollars per share) | $ / shares | 17.33 |
Ending balance (in dollars per share) | $ / shares | $ 18.39 |
Market-Based Awards | |
Unvested Restricted Stock Grants Outstanding | |
Beginning balance (in shares) | shares | 258,558 |
Forfeited during the period (in shares) | shares | (75,229) |
Vesting during the period (in shares) | shares | (46,660) |
Granted during the period (in shares) | shares | 169,002 |
Ending balance (in shares) | shares | 305,671 |
Weighted Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 20.38 |
Forfeited during the period (in dollars per share) | $ / shares | 17.26 |
Vesting during the period (in dollars per share) | $ / shares | 20.36 |
Granted during the period (in dollars per share) | $ / shares | 16.05 |
Ending balance (in dollars per share) | $ / shares | $ 18.76 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 shares | Jun. 30, 2023 shares | Jun. 30, 2024 shares | Dec. 31, 2023 shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
OP Unit conversion ratio per share | 1 | 1 | ||
OP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 440,654 | 507,773 | 459,520 | |
Restricted Stock Units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 69,023 | 152,785 | 118,790 | |
Forward Sale Agreement | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of loss per share (in shares) | 254,299 | 254,299 | 462,103 | |
OP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Units outstanding (in shares) | 437,058 | 437,058 | 479,298 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Net Income Attributable to Common Shares, Weighted Average Common Shares and Effect of Dilutive Securities (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator: | ||||||
Net (loss) income | $ (2,306) | $ 1,052 | $ (792) | $ 1,481 | $ (1,254) | $ 689 |
Net loss (income) attributable to noncontrolling interest | (15) | (1) | (8) | 8 | ||
Net (loss) income attributable to common shares, basic | (2,291) | (791) | (1,246) | 681 | ||
Net (loss) income attributable to noncontrolling interests | 15 | 1 | 8 | (8) | ||
Net (loss) income attributable to common shares, diluted | $ (2,306) | $ (792) | $ (1,254) | $ 689 | ||
Denominator: | ||||||
Weighted average common shares outstanding, basic (in shares) | 73,588,605 | 61,043,531 | 73,419,198 | 59,600,630 | ||
OP Units (in shares) | 0 | 0 | 0 | 509,588 | ||
Unvested RSUs (in shares) | 0 | 0 | 0 | 164,322 | ||
Unsettled shares under open forward equity contracts (in shares) | 0 | 0 | 0 | 20,194 | ||
Weighted average common shares outstanding - diluted (in shares) | 73,588,605 | 61,043,531 | 73,419,198 | 60,294,734 | ||
Net loss available to common stockholders per common share, basic (in dollars per share) | $ (0.03) | $ (0.01) | $ (0.02) | $ 0.01 | ||
Net loss available to common stockholders per common share, diluted (in dollars per share) | $ (0.03) | $ (0.01) | $ (0.02) | $ 0.01 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 1 Months Ended | 6 Months Ended |
Aug. 31, 2021 USD ($) renewalOption | Jun. 30, 2024 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Tenant improvement allowance commitments | $ 4.1 | |
Tenant improvement allowance commitments period | 2 years | |
Expected investment in real estate assets | $ 16.1 | |
Expected investment in real estate assets period | 18 months | |
Commitments to extend funds under mortgage notes receivable | $ 15.3 | |
Commitments to extend funds under mortgage notes receivable period | 12 months | |
Corporate Office Space | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Lease term | 8 years 1 month 6 days | |
Renewal options | renewalOption | 2 | |
Lease extension term | 5 years | |
Annual rent expense | $ 0.5 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | ||||||
Jul. 23, 2024 | Apr. 25, 2023 | Feb. 21, 2023 | Apr. 26, 2022 | Feb. 22, 2022 | Jul. 26, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Subsequent Event [Line Items] | ||||||||
Cash dividend declared (in dollars per share) | $ 0.205 | $ 0.205 | $ 0.200 | $ 0.200 | $ 0.400 | |||
Repayments under revolving credit facilities | $ 172,000 | $ 228,000 | ||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash dividend declared (in dollars per share) | $ 0.21 | |||||||
Subsequent Event | Credit Facility | Line of Credit | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayments under revolving credit facilities | $ 6,000 |