Cover
Cover | 3 Months Ended |
Mar. 31, 2024 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2024 |
Document Transition Report | false |
Entity File Number | 000-56236 |
Entity Registrant Name | Copper Property CTL Pass Through Trust |
Entity Incorporation, State or Country Code | NY |
Entity Tax Identification Number | 85-6822811 |
Entity Address, Address Line One | 3 Second Street, Suite 206 |
Entity Address, City or Town | Jersey City |
Entity Address, State or Province | NJ |
Entity Address, Postal Zip Code | 07311-4056 |
City Area Code | (201) |
Local Phone Number | 839-2200 |
Entity Current Reporting Status | No |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Central Index Key | 0001837671 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Investment properties: | ||
Land and improvements | $ 400,914 | $ 408,064 |
Building and other improvements | 485,216 | 492,937 |
Gross investment properties | 886,130 | 901,001 |
Less: accumulated depreciation | (44,729) | (41,818) |
Net investment properties | 841,401 | 859,183 |
Cash and cash equivalents | 49,787 | 38,026 |
Accounts receivable | 38,412 | 39,504 |
Lease intangible assets, net | 205,341 | 212,001 |
Right-of-use lease assets, net | 84,797 | 85,254 |
Other assets, net | 1,293 | 522 |
Total assets | 1,221,031 | 1,234,490 |
Liabilities: | ||
Accounts payable and accrued expenses | 1,686 | 1,224 |
Lease intangible liabilities, net | 87,855 | 93,078 |
Lease liabilities | 37,767 | 37,763 |
Other liabilities | 8,512 | 8,603 |
Total liabilities | 135,820 | 140,668 |
Commitments and contingencies (Note 4) | ||
Equity: | ||
Trust certificates, no par value, 75,000,000 certificates authorized, issued and outstanding, as of March 31, 2024 and December 31, 2023 | 0 | 0 |
Additional paid-in capital | 1,952,120 | 1,952,120 |
Accumulated distributions in excess of earnings | (866,909) | (858,298) |
Total equity | 1,085,211 | 1,093,822 |
Total liabilities and equity | $ 1,221,031 | $ 1,234,490 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Trust certificates, authorized (in shares) | 75,000,000 | 75,000,000 |
Trust certificates, issued (in shares) | 75,000,000 | 75,000,000 |
Trust certificates, outstanding (in shares) | 75,000,000 | 75,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Lease income | $ 25,582 | $ 25,524 |
Expenses: | ||
Operating expenses | 3,203 | 3,312 |
Depreciation and amortization | 4,757 | 4,830 |
General and administrative expenses | 1,523 | 1,839 |
Total expenses | 9,483 | 9,981 |
Other income: | ||
Gain on sales of investment properties, net | 1,348 | 828 |
Other income | 320 | 786 |
Total other income | 1,668 | 1,614 |
Net income | $ 17,767 | $ 17,157 |
Earnings per certificate – basic and diluted: | ||
Net income per certificate - basic (in usd per share) | $ 0.24 | $ 0.23 |
Net income per certificate - diluted (in usd per share) | $ 0.24 | $ 0.23 |
Weighted average number of certificates outstanding – basic (shares) | 75 | 75 |
Weighted average number of certificates outstanding – diluted (shares) | 75 | 75 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Trust Certificates | Additional Paid-in Capital | Accumulated Distributions in Excess of Earnings |
Balance (in shares) at Dec. 31, 2022 | 75,000,000 | |||
Balance at Dec. 31, 2022 | $ 1,150,663 | $ 1,952,120 | $ (801,457) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 17,157 | 17,157 | ||
Distributions paid to Certificateholders | (37,272) | (37,272) | ||
Balance (in shares) at Mar. 31, 2023 | 75,000,000 | |||
Balance at Mar. 31, 2023 | 1,130,548 | 1,952,120 | (821,572) | |
Balance (in shares) at Dec. 31, 2023 | 75,000,000 | |||
Balance at Dec. 31, 2023 | 1,093,822 | 1,952,120 | (858,298) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 17,767 | 17,767 | ||
Distributions paid to Certificateholders | (26,378) | (26,378) | ||
Balance (in shares) at Mar. 31, 2024 | 75,000,000 | |||
Balance at Mar. 31, 2024 | $ 1,085,211 | $ 1,952,120 | $ (866,909) |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Distributions paid to certificateholders (usd per share) | $ 0.35 | $ 0.50 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 17,767 | $ 17,157 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,757 | 4,830 |
Straight-line rental income, net | 580 | 590 |
Amortization of above/below market leases, net | 561 | 551 |
Gain on sales of investment properties, net | (1,348) | (828) |
Changes in assets and liabilities: | ||
Changes in accounts receivable | 0 | 192 |
Changes in other assets | (1,137) | (569) |
Changes in right-of-use lease assets | 457 | 459 |
Changes in accounts payable and accrued expenses | 493 | 361 |
Changes in lease liabilities | 4 | 24 |
Changes in other liabilities | (91) | (49) |
Net cash provided by operating activities | 22,043 | 22,718 |
Cash flows from investing activities: | ||
Proceeds from sales of investment properties | 16,096 | 7,196 |
Net cash provided by investing activities | 16,096 | 7,196 |
Cash flows from financing activities: | ||
Distributions paid to Certificateholders | (26,378) | (37,272) |
Net cash used in financing activities | (26,378) | (37,272) |
Net change in cash and cash equivalents | 11,761 | (7,358) |
Cash and cash equivalents, at beginning of period | 38,026 | 48,922 |
Cash and cash equivalents, at end of period | $ 49,787 | $ 41,564 |
ORGANIZATION AND FINANCIAL STAT
ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION | ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION Overview Copper Property CTL Pass Through Trust, a New York common law trust (the “Trust,” “we,” “our” or “us”) was formed on December 21, 2020, in connection with the reorganization of Old Copper Company, Inc. (f/k/a J. C. Penney Company, Inc.) (“Old Copper”), effective as of January 30, 2021 (the “Effective Date”) pursuant to the terms of the Amended Joint Chapter 11 Plan of Reorganization of Old Copper and certain of its subsidiaries (collectively, the “Debtors”) (the “Plan of Reorganization”). On the Effective Date, through separate wholly-owned property holding companies (the "PropCos"), the Trust acquired 160 retail properties (the “Retail Properties”) and six distribution centers (the “Warehouses” and, together with the Retail Properties, the “Properties”) all of which were leased under two Master Leases (as discussed in Note 3) to one or more subsidiaries of Copper Retail JV LLC (“OpCo Purchaser”) (collectively with its subsidiaries, “Penney Intermediate Holdings LLC”), an entity formed by and under the joint control of Simon Property Group, L.P. and Brookfield Asset Management Inc. Specifically, the PropCos include (i) CTL Propco I LLC, a Delaware limited liability company, CTL Propco I L.P., a Delaware limited partnership and CTL Propco PR I LLC and CTL Propco PR II LLC, Puerto Rico limited liability companies, which collectively own the fee simple or ground leasehold title (as applicable) to the Retail Properties and (ii) CTL Propco II LLC, a Delaware limited liability company and CTL Propco II L.P., a Delaware limited partnership, which collectively owned the fee simple title to the Warehouses. During 2021, the Trust sold all six Warehouses and in 2022, CTL Propco II LLC and CTL Propco II L.P. were dissolved. The Trust’s operations consist solely of (i) owning the Properties and interests as lessee of land under non-cancellable ground leases, (ii) leasing the Properties under the terms of the Retail Master Lease to Penney Intermediate Holdings LLC as the sole tenant and (iii) subject to market conditions and the conditions set forth in the Trust Agreement (as defined below), selling the Properties to third-party purchasers through the PropCos. As of March 31, 2024, the real estate portfolio consists of 127 Retail Properties, of which 21 are encumbered by ground leases, in the United States (the "U.S.") across 35 states and Puerto Rico, and comprising 17 million square feet of leasable space. Trust Agreement The Amended and Restated Trust Agreement (as amended, the “Trust Agreement”) is dated as of the Effective Date. The Trust Agreement created a series of equity trust certificates designated as “Copper Property CTL Pass Through Certificates” (the “Trust Certificates”), 75,000,000 of which were issued on the Effective Date. Each Trust Certificate represents a fractional undivided beneficial interest in the Trust and represents the interests of the holders of the Trust Certificates (“Certificateholders”) in the Trust. GLAS Trust Company, LLC, as the Trust's independent third-party trustee (the "Trustee") pursuant to the terms of the Trust Agreement, performs trust administration duties, including treasury management and certificate administration, and earns trustee fees. The Trust pays the Trustee an annual service fee of $100, which is amortized monthly. For both the three months ended March 31, 2024 and 2023, the Trust incurred trustee fees of $25. Management Agreement The Trust has retained Hilco JCP LLC, an affiliate of Hilco Real Estate LLC, as its independent third-party manager to perform asset management duties with respect to the Properties (together with any of its affiliates, replacement or successor, the “Manager”) pursuant to an agreement with an initial term of 24 months, with automatic six month renewals until the termination of the Trust. The Trust pays the Manager a base management fee (the “Base Fee”) and fee for each property sold (the “Asset Management Fee”). The Base Fee is an amount equal to the greater of 5.75% of the lease payments of the Properties per month and $333 per month. The Asset Management Fees consist of a success fee for each Retail Property sold which varies based on the sales proceeds and date sold. The Trust incurred Base Fees of $1,477 and $1,475 for the three months ended March 31, 2024 and 2023, respectively, which are included in “Operating expenses” on the accompanying consolidated statements of operations, of which $490 and $491 as of March 31, 2024 and 2023, respectively were included in “Accounts payable and accrued expenses” on the accompanying consolidated balance sheets. The Trust incurred Asset Management Fees of $88 and $15 for the three months ended March 31, 2024 and 2023, respectively which are included in “Gain on sales of investment properties, net” on the accompanying consolidated statements of operations. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Trust, as well as all wholly owned subsidiaries of the Trust. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited interim consolidated financial statements include the quarterly periods ended March 31, 2024 and 2023 (the “Reporting Periods”) and have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been omitted in accordance with such rules and regulations. The information presented in the accompanying consolidated financial statements is unaudited and reflects all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods presented, and all such adjustments are of a normal recurring nature. Amounts as of December 31, 2023 included in the consolidated financial statements have been derived from the audited consolidated financial statements as of that date but does not include all annual disclosures required by GAAP. These consolidated financial statements should be read in conjunction with the Trust's Annual Report on Form 10-K, as amended, for the year ended December 31, 2023 (the "10-K"), as certain disclosures in this Quarterly Report on Form 10-Q that would duplicate those included in the 10-K are not included in these consolidated financial statements. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ended December 31, 2024. Reclassifications For the three months ended March 31, 2023, amounts have been reclassified from "changes in accounts receivable" to "straight-line rental income, net" in the accompanying consolidated statements of cash flows to conform with the 2024 presentation. |
INVESTMENT PROPERTIES
INVESTMENT PROPERTIES | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
INVESTMENT PROPERTIES | INVESTMENT PROPERTIES As of March 31, 2024, the Trust's real estate portfolio consisted of 127 Retail Properties across 35 U.S. states and Puerto Rico. The following table presents the amortization during the next five years and thereafter related to the lease intangible assets and liabilities for properties owned as of March 31, 2024: Period from April 1 to December 31, 2024 2025 2026 2027 2028 Thereafter Total Amortization of: Above market lease intangibles (a) $ 5,663 $ 7,550 $ 7,550 $ 7,550 $ 7,550 $ 90,606 $ 126,469 In-place lease intangibles (a) 3,532 4,709 4,709 4,709 4,709 56,504 78,872 Lease intangible assets, net (b) $ 9,195 $ 12,259 $ 12,259 $ 12,259 $ 12,259 $ 147,110 $ 205,341 Below market lease intangibles (a) $ 3,934 $ 5,245 $ 5,245 $ 5,245 $ 5,245 $ 62,941 $ 87,855 Lease intangible liabilities, net (b) $ 3,934 $ 5,245 $ 5,245 $ 5,245 $ 5,245 $ 62,941 $ 87,855 (a) Represents the portion of the leases in which the Trust is the lessor. The amortization of above market lease intangibles is recorded as a reduction to lease income, and the amortization of below market lease intangibles is recorded as an increase to lease income. The amortization of in-place lease intangibles is recorded to depreciation and amortization expense. (b) As of March 31, 2024, lease intangible assets, net and lease intangible liabilities, net are presented net of $38,821 and $16,609 of accumulated amortization, respectively. As of December 31, 2023, lease intangible assets, net and lease intangible liabilities, net are presented net of $36,373 and $15,969 of accumulated amortization, respectively. As of March 31, 2024 and December 31, 2023, the weighted average amortization period for lease intangible assets and lease intangible liabilities was 16.8 years and 17.0 years, respectively. Amortization for the three months ended March 31, 2024 and 2023 were as follows: Three Months Ended March 31, 2024 2023 Amortization of: In-place lease intangibles $ 1,190 $ 1,214 Above market lease intangibles $ 1,910 $ 1,957 Below market lease intangibles $ 1,349 $ 1,406 Dispositions The following table summarizes the disposition activity for the three months ended March 31, 2024: Sale Date Location Property Type Ownership Square Footage Gross Sales Proceeds Aggregate Proceeds, Net Gain (Loss) 3/15/24 Transnational Portfolio (1) Retail Fee Simple 302 $ 16,459 $ 16,096 $ 1,502 302 $ 16,459 16,096 $ 1,502 (1) Portfolio comprised of three Retail Properties located in Newnan, GA, Aurora, CO, and Kissimmee, FL. During the three months ended March 31, 2024, gain on sales of investment properties, net was $1,348, which includes $154 of selling expenses from prior period dispositions and a net gain of $1,502 from the disposition of Retail Properties in Newnan, GA, Aurora, CO and Kissimmee, FL. The following table summarizes the disposition activity during the three months ended March 31, 2023: Sale Date Location Property Type Ownership Square Footage Gross Sales Proceeds Aggregate Proceeds, Net Gain (Loss) 3/22/23 Temecula, CA Retail Fee Simple 125 $ 6,000 $ 5,869 $ (496) 125 $ 6,000 5,869 $ (496) During the three months ended March 31, 2023, gain on sales of investment properties, net was $828, which includes a gain of $1,326 less $2 of selling expenses from the release of escrow from a disposition that occurred in December 2021 and a loss of $496 from the disposition of the Retail Property in Temecula, California. The dispositions completed during the three months ended March 31, 2024 and 2023 did not qualify for discontinued operations treatment and are not considered individually significant. Impairment of Investment Properties For the three months ended March 31, 2024 and 2023, no impairment charges were recorded. Investment Properties Held for Sale As of March 31, 2024 and December 31, 2023, there were no properties classified as held for sale. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
LEASES | LEASES Leases as Lessor The Retail Properties are leased pursuant to a single retail master lease (as amended, modified or supplemented from time to time, the “Retail Master Lease”) and the Warehouses were leased pursuant to a single distribution center master lease (as amended, modified or supplemented from time to time, the “DC Master Lease”; together with the Retail Master Lease, the “Master Leases” and individually, each a “Master Lease”). On the Effective Date, Penney Intermediate Holdings LLC assigned all of its right, title and interest as lessor under the Master Leases to the applicable PropCo. Each of the Master Leases has an initial term of 20 years that commenced on December 7, 2020 and is classified as an operating lease. The Trust receives monthly base rent pursuant to the Master Leases, which was 50% abated through December 31, 2021 for each of the Retail Properties. At the beginning of the third lease year, base rent under the Retail Master Lease increases based on changes in the consumer price index (subject to a maximum 2% increase per year). Pursuant to the Retail Master Lease, lease payments increased in December 2023 based on changes in the consumer price index ("CPI"). Upon the sale of the Warehouses in December 2021, the Trust assigned all of its right, title and interest as lessor in the DC Master Lease to the purchaser. The Master Lease requires direct payment of all operating expenses, real estate taxes, ground lease payments (where applicable), capital expenditures and common area maintenance costs by Penney Intermediate Holdings LLC and allows for lessor reimbursement if amounts are not directly paid. Expenses paid directly by Penney Intermediate Holdings LLC are not included in the accompanying consolidated statement of operations, except for ground lease payments made by Penney Intermediate Holdings LLC, since recording cash payments made by Penney Intermediate Holdings LLC is necessary to relieve amounts due to the ground lessor included in the ground lease liabilities. Ground lease payments made by Penney Intermediate Holdings LLC of $1,035 and $1,012 for the three months ended March 31, 2024 and 2023, respectively, were paid directly to the ground lessor by Penney Intermediate Holdings LLC and were included in “Lease income” in the accompanying consolidated statements of operations. As of March 31, 2024, lease payments of $8,470 received in advance under the terms of the Master Leases are included in "Other liabilities" in the accompanying consolidated balance sheets and will be recognized as lease income in April 2024. As of December 31, 2023, lease payments of $8,583 received in advance under the terms of the Master Leases are included in "Other liabilities" in the accompanying consolidated balance sheets and were recognized as lease income in January 2024. The Trust records all changes in uncollectible lease income as an adjustment to “Lease income” in the accompanying consolidated statement of operations. During the Reporting Periods, there was no uncollectible lease income. In certain municipalities, the Trust is required to remit sales and use taxes to governmental authorities based upon the rental income received from Properties. These taxes are required to be reimbursed by Penney Intermediate Holdings LLC to the Trust in accordance with the terms of the Master Lease, and are presented net of reimbursement from Penney Intermediate Holdings LLC on the consolidated statements of operations. During the three months ended March 31, 2024 and 2023, the Trust remitted sales and use taxes of $160 and $186, respectively, which were fully reimbursed by Penney Intermediate Holdings LLC as of the end of each corresponding Reporting Period. From time to time, the Trust may have leasing activity with replacement tenants other than Penney Intermediate Holdings LLC but has had none to date. The disaggregation of the Trust’s lease income as either fixed or variable lease income based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification ("ASC") Topic 842 is as follows: Three Months Ended March 31, 2024 2023 Fixed lease income $ 25,184 $ 25,653 Variable lease income (a) 504 — Straight-line rental income, net (b) (580) (590) Ground lease reimbursement income (c) 1,035 1,012 Other Amortization of above and below market lease intangibles (d) (561) (551) Lease income $ 25,582 $ 25,524 (a) Variable lease income consists of lease payments based on either an index or a rate. (b) Represents the impact of straight-line rent (contractual rent exceeds straight line rent). (c) Ground lease reimbursement income consists of lease payments due from the tenant for land leased under non-cancellable operating leases. (d) Represents above and below market lease amortization recognized straight line over the lease term. As of March 31, 2024, undiscounted lease payments to be received under operating leases, excluding amounts resulting from CPI adjustments, for the next five years and thereafter are as follows: Lease Payments Period from April 1 to December 31, 2024 $ 74,738 2025 99,651 2026 99,651 2027 99,651 2028 99,651 Thereafter 1,195,813 Total $ 1,669,155 The weighted average remaining lease term was approximately 16.8 years as of March 31, 2024. Leases as Lessee The Trust was assigned an interest as lessee of land under 23 non-cancellable ground leases with third party landlords which were classified as operating leases on the Effective Date. As of March 31, 2024, the Trust held an interest as lessee of land under 21 non-cancellable ground leases. The Trust leases land under operating ground leases at certain of its Properties, which expire in various years from 2038 to 2096, including any available option periods that are reasonably certain to be exercised. All option terms were considered to be reasonably certain of being exercised through the initial term of the Master Lease. The components of ground lease rent expense, which are included within “Operating expenses” in the accompanying consolidated statements of operations for the three months ended March 31, 2024 and 2023, were as follows: Three Months Ended March 31, 2024 2023 Amortization of: Above market ground lease intangibles $ (160) $ (160) Below market ground lease intangibles 365 365 Amortization of right-of-use assets 252 254 Interest expense 1,038 1,036 Ground lease rent expense $ 1,495 $ 1,495 There were no cash payments for ground lease rent expense as these payments are made by the tenant. As of March 31, 2024, undiscounted future rental obligations to be paid under the long-term ground leases by Penney Intermediate Holdings LLC under the terms of the Master Lease on behalf of the Trust, including fixed rental increases, for the next five years and thereafter, are as follows: Lease Obligations Period from April 1 to December 31, 2024 $ 3,089 2025 4,116 2026 4,138 2027 4,197 2028 4,257 Thereafter 215,902 Less imputed interest (197,932) Lease liabilities as of March 31, 2024 $ 37,767 The Trust’s long-term ground leases had a weighted average remaining lease term of 43.1 years and a weighted average discount rate of 11.0% as of March 31, 2024. |
LEASES | LEASES Leases as Lessor The Retail Properties are leased pursuant to a single retail master lease (as amended, modified or supplemented from time to time, the “Retail Master Lease”) and the Warehouses were leased pursuant to a single distribution center master lease (as amended, modified or supplemented from time to time, the “DC Master Lease”; together with the Retail Master Lease, the “Master Leases” and individually, each a “Master Lease”). On the Effective Date, Penney Intermediate Holdings LLC assigned all of its right, title and interest as lessor under the Master Leases to the applicable PropCo. Each of the Master Leases has an initial term of 20 years that commenced on December 7, 2020 and is classified as an operating lease. The Trust receives monthly base rent pursuant to the Master Leases, which was 50% abated through December 31, 2021 for each of the Retail Properties. At the beginning of the third lease year, base rent under the Retail Master Lease increases based on changes in the consumer price index (subject to a maximum 2% increase per year). Pursuant to the Retail Master Lease, lease payments increased in December 2023 based on changes in the consumer price index ("CPI"). Upon the sale of the Warehouses in December 2021, the Trust assigned all of its right, title and interest as lessor in the DC Master Lease to the purchaser. The Master Lease requires direct payment of all operating expenses, real estate taxes, ground lease payments (where applicable), capital expenditures and common area maintenance costs by Penney Intermediate Holdings LLC and allows for lessor reimbursement if amounts are not directly paid. Expenses paid directly by Penney Intermediate Holdings LLC are not included in the accompanying consolidated statement of operations, except for ground lease payments made by Penney Intermediate Holdings LLC, since recording cash payments made by Penney Intermediate Holdings LLC is necessary to relieve amounts due to the ground lessor included in the ground lease liabilities. Ground lease payments made by Penney Intermediate Holdings LLC of $1,035 and $1,012 for the three months ended March 31, 2024 and 2023, respectively, were paid directly to the ground lessor by Penney Intermediate Holdings LLC and were included in “Lease income” in the accompanying consolidated statements of operations. As of March 31, 2024, lease payments of $8,470 received in advance under the terms of the Master Leases are included in "Other liabilities" in the accompanying consolidated balance sheets and will be recognized as lease income in April 2024. As of December 31, 2023, lease payments of $8,583 received in advance under the terms of the Master Leases are included in "Other liabilities" in the accompanying consolidated balance sheets and were recognized as lease income in January 2024. The Trust records all changes in uncollectible lease income as an adjustment to “Lease income” in the accompanying consolidated statement of operations. During the Reporting Periods, there was no uncollectible lease income. In certain municipalities, the Trust is required to remit sales and use taxes to governmental authorities based upon the rental income received from Properties. These taxes are required to be reimbursed by Penney Intermediate Holdings LLC to the Trust in accordance with the terms of the Master Lease, and are presented net of reimbursement from Penney Intermediate Holdings LLC on the consolidated statements of operations. During the three months ended March 31, 2024 and 2023, the Trust remitted sales and use taxes of $160 and $186, respectively, which were fully reimbursed by Penney Intermediate Holdings LLC as of the end of each corresponding Reporting Period. From time to time, the Trust may have leasing activity with replacement tenants other than Penney Intermediate Holdings LLC but has had none to date. The disaggregation of the Trust’s lease income as either fixed or variable lease income based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification ("ASC") Topic 842 is as follows: Three Months Ended March 31, 2024 2023 Fixed lease income $ 25,184 $ 25,653 Variable lease income (a) 504 — Straight-line rental income, net (b) (580) (590) Ground lease reimbursement income (c) 1,035 1,012 Other Amortization of above and below market lease intangibles (d) (561) (551) Lease income $ 25,582 $ 25,524 (a) Variable lease income consists of lease payments based on either an index or a rate. (b) Represents the impact of straight-line rent (contractual rent exceeds straight line rent). (c) Ground lease reimbursement income consists of lease payments due from the tenant for land leased under non-cancellable operating leases. (d) Represents above and below market lease amortization recognized straight line over the lease term. As of March 31, 2024, undiscounted lease payments to be received under operating leases, excluding amounts resulting from CPI adjustments, for the next five years and thereafter are as follows: Lease Payments Period from April 1 to December 31, 2024 $ 74,738 2025 99,651 2026 99,651 2027 99,651 2028 99,651 Thereafter 1,195,813 Total $ 1,669,155 The weighted average remaining lease term was approximately 16.8 years as of March 31, 2024. Leases as Lessee The Trust was assigned an interest as lessee of land under 23 non-cancellable ground leases with third party landlords which were classified as operating leases on the Effective Date. As of March 31, 2024, the Trust held an interest as lessee of land under 21 non-cancellable ground leases. The Trust leases land under operating ground leases at certain of its Properties, which expire in various years from 2038 to 2096, including any available option periods that are reasonably certain to be exercised. All option terms were considered to be reasonably certain of being exercised through the initial term of the Master Lease. The components of ground lease rent expense, which are included within “Operating expenses” in the accompanying consolidated statements of operations for the three months ended March 31, 2024 and 2023, were as follows: Three Months Ended March 31, 2024 2023 Amortization of: Above market ground lease intangibles $ (160) $ (160) Below market ground lease intangibles 365 365 Amortization of right-of-use assets 252 254 Interest expense 1,038 1,036 Ground lease rent expense $ 1,495 $ 1,495 There were no cash payments for ground lease rent expense as these payments are made by the tenant. As of March 31, 2024, undiscounted future rental obligations to be paid under the long-term ground leases by Penney Intermediate Holdings LLC under the terms of the Master Lease on behalf of the Trust, including fixed rental increases, for the next five years and thereafter, are as follows: Lease Obligations Period from April 1 to December 31, 2024 $ 3,089 2025 4,116 2026 4,138 2027 4,197 2028 4,257 Thereafter 215,902 Less imputed interest (197,932) Lease liabilities as of March 31, 2024 $ 37,767 The Trust’s long-term ground leases had a weighted average remaining lease term of 43.1 years and a weighted average discount rate of 11.0% as of March 31, 2024. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Master Leases Landlord Option Properties: On the Effective Date, the Retail Master Lease provides the Trust an option on 23 of the Retail Properties allowing current or future landlords to terminate the Retail Master Lease as to that property upon 24 months’ prior written notice. This option is limited (for the Trust, but not for future landlords) to eight Retail Properties in any lease year. During the three months ended March 31, 2024, no Retail Properties with landlord termination options were sold. As of March 31, 2024, the Trust had sold 16 Retail Properties with landlord termination options, and there were seven remaining Retail Properties with landlord termination options. Tenant Option Properties: On the Effective Date, the Retail Master Lease provided Penney Intermediate Holdings LLC an option to terminate the Retail Master Lease upon 24 months’ prior written notice as to all or a portion of any one or more of six specified properties. This option is limited to no more than five Properties in any lease year. During the three months ended March 31, 2024, no Retail Properties with tenant termination options were sold. As of March 31, 2024, the Trust had sold five Retail Properties with tenant termination options, and there was one remaining Retail Property with a tenant termination option. Substitution Options and Go Dark Rights: The Retail Master Lease provides Penney Intermediate Holdings LLC an option to terminate the Retail Master Lease with respect to selected sub-performing properties upon replacement of such sub-performing properties with a qualified replacement property in accordance with the terms and conditions of the Retail Master Lease. Notwithstanding the foregoing, Penney Intermediate Holdings LLC shall only be entitled to exercise a substitution option (i) between the third and 15th anniversary of the commencement date of the Retail Master Lease and (ii) if the aggregate allocated base rent amounts for all Go Dark/Substitution Properties (as defined in the Retail Master Lease) during the applicable period (as described in the Retail Master Lease) is less than or equal to 15% of the aggregate first year’s base rent. The Retail Master Lease also provides Penney Intermediate Holdings LLC with the limited right to “go dark” (i.e., cease operations) at one or more Retail Properties in certain limited circumstances as set forth in the Retail Master Lease; provided that such right does not relieve Penney Intermediate Holdings LLC of its obligation to make any rent payments that are due and owing. As of March 31, 2024, Penney Intermediate Holdings LLC has not ceased operations at any of the Retail Properties. Tenant Purchase Rights: On the Effective Date, the Master Leases contained preferential offer rights in favor of Penney Intermediate Holdings LLC with respect to 70 of the Retail Properties and each of the Warehouses (the “Tenant Purchase Rights”), which enable Penney Intermediate Holdings LLC, in connection with a potential sale of such Properties, to acquire such Properties for a price determined in accordance with the procedures set forth in the Master Leases. These Tenant Purchase Rights require the Trust to reoffer a property to the tenant in the event it is not sold within a specified period of time at a specified minimum price related to the preferential purchase price. As of March 31, 2024, 18 of these Retail Properties, of which three were purchased by an affiliate of the tenant, and all of the Warehouses, of which none were purchased by the tenant, have been sold. Lockout Periods: The Trust agreed not to deliver notice to Penney Intermediate Holdings LLC formally commencing the sales process at those Properties subject to the Tenant Purchase Rights prior to the dates specified in the applicable Master Lease for such Properties. All lockout periods with respect to the Tenant Purchase Rights for the 70 Retail Properties have expired. Environmental Matters Federal law (and the laws of some states in which we own or may acquire properties) imposes liability on a landowner for the presence on the premises of hazardous substances or wastes (as defined by present and future federal and state laws and regulations). This liability is without regard to fault or knowledge of the presence of such substances and may be imposed jointly and severally upon all succeeding landowners. If such hazardous substance is discovered on a property owned by us, we could incur liability for the removal of the substances and the cleanup of the property. There can be no assurance that we would have effective remedies against prior owners of the property. In addition, we may be liable to current or future tenants and may find it difficult or impossible to sell the property either prior to or following such a cleanup. There are no environmental matters that are expected to have a material effect on the Trust’s consolidated financial statements. Risk of Uninsured Property Losses The Trust maintains property damage, fire loss, environmental, and liability insurance in addition to the insurance required to be maintained by the Tenant pursuant to the Master Leases. However, there are certain types of losses (generally of a catastrophic nature) which may be either uninsurable or not economically insurable. Such excluded risks may include war, earthquakes, tornados, floods and certain other environmental hazards. Should such events occur, (i) we may suffer a loss of capital invested, (ii) tenant may suffer losses and may be unable to pay rent for the spaces, and (iii) we may suffer a loss of profits which might be anticipated from one or more properties. Significant Risks and Uncertainties Although disruptions stemming from the COVID-19 pandemic have subsided, inflation, rising interest rates, reduced consumer spending, labor shortages, supply chain disruptions and global capital markets volatility pose increasing risks to the Company and the U.S. economy. The ongoing and potential future impacts of global conflicts, such as between Russia and Ukraine and in the Middle East, among others is also contributing to economic and geopolitical uncertainty. While we did not incur any disruptions to our lease income and occupancy during the three months ended March 31, 2024, as a result of these adverse political and economic conditions, credit markets or other events, we continue to closely monitor the impact of these factors as they may have a negative impact on our or Penney Intermediate Holdings LLC’s business. Concentration of Credit Risk As of March 31, 2024, all of the Properties were leased to Penney Intermediate Holdings LLC, and all of the Trust’s lease income was derived from the Master Leases (see Note 3). The Properties' tenants constitute a significant asset concentration, as all tenants are subsidiaries of Penney Intermediate Holdings LLC, and Penney Intermediate Holdings LLC provides financial guarantees with respect to the Master Leases. Until the Trust materially diversifies the composition of tenants for its properties, an event that has a material adverse effect on Penney Intermediate Holdings LLC’s business, financial condition or results of operations could have a material adverse effect on the Trust’s business, financial condition or results of operations. As of March 31, 2024, the Trust's properties are located across 35 U.S. states and Puerto Rico. For the three months ended March 31, 2024, the Trust's lease income was concentrated in two states as follows: California 19.1% and Texas 13.2%. For the three months ended March 31, 2023, the Trust's lease income was concentrated in two states as follows: California 19.0% and Texas 13.5%. Litigation From time to time, the Trust may be subject to various legal proceedings and claims that arise in the ordinary course of business. There are no current matters that are expected to have a material effect on the Trust’s consolidated financial statements. Income Taxes As of March 31, 2024 and December 31, 2023, there were no uncertain tax positions and the balance of unrecognized tax benefits was $0. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Subsequent to March 31, 2024, we paid monthly distributions to Certificateholders of $23,599 or $0.31 per certificate in April 2024. On May 7, 2024, we announced a distribution of $7,684 or $0.10 per certificate to be paid on May 10, 2024 to Certificateholders. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 17,767 | $ 17,157 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
ORGANIZATION AND FINANCIAL ST_2
ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview | Overview Copper Property CTL Pass Through Trust, a New York common law trust (the “Trust,” “we,” “our” or “us”) was formed on December 21, 2020, in connection with the reorganization of Old Copper Company, Inc. (f/k/a J. C. Penney Company, Inc.) (“Old Copper”), effective as of January 30, 2021 (the “Effective Date”) pursuant to the terms of the Amended Joint Chapter 11 Plan of Reorganization of Old Copper and certain of its subsidiaries (collectively, the “Debtors”) (the “Plan of Reorganization”). On the Effective Date, through separate wholly-owned property holding companies (the "PropCos"), the Trust acquired 160 retail properties (the “Retail Properties”) and six distribution centers (the “Warehouses” and, together with the Retail Properties, the “Properties”) all of which were leased under two Master Leases (as discussed in Note 3) to one or more subsidiaries of Copper Retail JV LLC (“OpCo Purchaser”) (collectively with its subsidiaries, “Penney Intermediate Holdings LLC”), an entity formed by and under the joint control of Simon Property Group, L.P. and Brookfield Asset Management Inc. Specifically, the PropCos include (i) CTL Propco I LLC, a Delaware limited liability company, CTL Propco I L.P., a Delaware limited partnership and CTL Propco PR I LLC and CTL Propco PR II LLC, Puerto Rico limited liability companies, which collectively own the fee simple or ground leasehold title (as applicable) to the Retail Properties and (ii) CTL Propco II LLC, a Delaware limited liability company and CTL Propco II L.P., a Delaware limited partnership, which collectively owned the fee simple title to the Warehouses. During 2021, the Trust sold all six Warehouses and in 2022, CTL Propco II LLC and CTL Propco II L.P. were dissolved. The Trust’s operations consist solely of (i) owning the Properties and interests as lessee of land under non-cancellable ground leases, (ii) leasing the Properties under the terms of the Retail Master Lease to Penney Intermediate Holdings LLC as the sole tenant and (iii) subject to market conditions and the conditions set forth in the Trust Agreement (as defined below), selling the Properties to third-party purchasers through the PropCos. As of March 31, 2024, the real estate portfolio consists of 127 Retail Properties, of which 21 are encumbered by ground leases, in the United States (the "U.S.") across 35 states and Puerto Rico, and comprising 17 million square feet of leasable space. Trust Agreement |
Management Agreement | Management Agreement The Trust has retained Hilco JCP LLC, an affiliate of Hilco Real Estate LLC, as its independent third-party manager to perform asset management duties with respect to the Properties (together with any of its affiliates, replacement or successor, the “Manager”) pursuant to an agreement with an initial term of 24 months, with automatic six month renewals until the termination of the Trust. The Trust pays the Manager a base management fee (the “Base Fee”) and fee for each property sold (the “Asset Management Fee”). The Base Fee is an amount equal to the greater of 5.75% of the lease payments of the Properties per month and $333 per month. The Asset Management Fees consist of a success fee for each Retail Property sold which varies based on the sales proceeds and date sold. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of the Trust, as well as all wholly owned subsidiaries of the Trust. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited interim consolidated financial statements include the quarterly periods ended March 31, 2024 and 2023 (the “Reporting Periods”) and have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been omitted in accordance with such rules and regulations. The information presented in the accompanying consolidated financial statements is unaudited and reflects all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods presented, and all such adjustments are of a normal recurring nature. Amounts as of December 31, 2023 included in the consolidated financial statements have been derived from the audited consolidated financial statements as of that date but does not include all annual disclosures required by GAAP. These consolidated financial statements should be read in conjunction with the Trust's Annual Report on Form 10-K, as amended, for the year ended December 31, 2023 (the "10-K"), as certain disclosures in this Quarterly Report on Form 10-Q that would duplicate those included in the 10-K are not included in these consolidated financial statements. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ended December 31, 2024. |
Reclassifications | Reclassifications For the three months ended March 31, 2023, amounts have been reclassified from "changes in accounts receivable" to "straight-line rental income, net" in the accompanying consolidated statements of cash flows to conform with the 2024 presentation. |
INVESTMENT PROPERTIES (Tables)
INVESTMENT PROPERTIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Amortization related to the acquired lease intangible assets and liabilities | The following table presents the amortization during the next five years and thereafter related to the lease intangible assets and liabilities for properties owned as of March 31, 2024: Period from April 1 to December 31, 2024 2025 2026 2027 2028 Thereafter Total Amortization of: Above market lease intangibles (a) $ 5,663 $ 7,550 $ 7,550 $ 7,550 $ 7,550 $ 90,606 $ 126,469 In-place lease intangibles (a) 3,532 4,709 4,709 4,709 4,709 56,504 78,872 Lease intangible assets, net (b) $ 9,195 $ 12,259 $ 12,259 $ 12,259 $ 12,259 $ 147,110 $ 205,341 Below market lease intangibles (a) $ 3,934 $ 5,245 $ 5,245 $ 5,245 $ 5,245 $ 62,941 $ 87,855 Lease intangible liabilities, net (b) $ 3,934 $ 5,245 $ 5,245 $ 5,245 $ 5,245 $ 62,941 $ 87,855 (a) Represents the portion of the leases in which the Trust is the lessor. The amortization of above market lease intangibles is recorded as a reduction to lease income, and the amortization of below market lease intangibles is recorded as an increase to lease income. The amortization of in-place lease intangibles is recorded to depreciation and amortization expense. (b) As of March 31, 2024, lease intangible assets, net and lease intangible liabilities, net are presented net of $38,821 and $16,609 of accumulated amortization, respectively. As of December 31, 2023, lease intangible assets, net and lease intangible liabilities, net are presented net of $36,373 and $15,969 of accumulated amortization, respectively. |
Amortization expense | Amortization for the three months ended March 31, 2024 and 2023 were as follows: Three Months Ended March 31, 2024 2023 Amortization of: In-place lease intangibles $ 1,190 $ 1,214 Above market lease intangibles $ 1,910 $ 1,957 Below market lease intangibles $ 1,349 $ 1,406 |
Dispositions | The following table summarizes the disposition activity for the three months ended March 31, 2024: Sale Date Location Property Type Ownership Square Footage Gross Sales Proceeds Aggregate Proceeds, Net Gain (Loss) 3/15/24 Transnational Portfolio (1) Retail Fee Simple 302 $ 16,459 $ 16,096 $ 1,502 302 $ 16,459 16,096 $ 1,502 (1) Portfolio comprised of three Retail Properties located in Newnan, GA, Aurora, CO, and Kissimmee, FL. The following table summarizes the disposition activity during the three months ended March 31, 2023: Sale Date Location Property Type Ownership Square Footage Gross Sales Proceeds Aggregate Proceeds, Net Gain (Loss) 3/22/23 Temecula, CA Retail Fee Simple 125 $ 6,000 $ 5,869 $ (496) 125 $ 6,000 5,869 $ (496) |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Lease income related to operating leases | The disaggregation of the Trust’s lease income as either fixed or variable lease income based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification ("ASC") Topic 842 is as follows: Three Months Ended March 31, 2024 2023 Fixed lease income $ 25,184 $ 25,653 Variable lease income (a) 504 — Straight-line rental income, net (b) (580) (590) Ground lease reimbursement income (c) 1,035 1,012 Other Amortization of above and below market lease intangibles (d) (561) (551) Lease income $ 25,582 $ 25,524 (a) Variable lease income consists of lease payments based on either an index or a rate. (b) Represents the impact of straight-line rent (contractual rent exceeds straight line rent). (c) Ground lease reimbursement income consists of lease payments due from the tenant for land leased under non-cancellable operating leases. (d) Represents above and below market lease amortization recognized straight line over the lease term. |
Undiscounted lease payments to be received under operating leases | As of March 31, 2024, undiscounted lease payments to be received under operating leases, excluding amounts resulting from CPI adjustments, for the next five years and thereafter are as follows: Lease Payments Period from April 1 to December 31, 2024 $ 74,738 2025 99,651 2026 99,651 2027 99,651 2028 99,651 Thereafter 1,195,813 Total $ 1,669,155 |
Components of ground lease rent expense | The components of ground lease rent expense, which are included within “Operating expenses” in the accompanying consolidated statements of operations for the three months ended March 31, 2024 and 2023, were as follows: Three Months Ended March 31, 2024 2023 Amortization of: Above market ground lease intangibles $ (160) $ (160) Below market ground lease intangibles 365 365 Amortization of right-of-use assets 252 254 Interest expense 1,038 1,036 Ground lease rent expense $ 1,495 $ 1,495 |
Undiscounted future rental obligations to be paid under long-term ground and office leases | As of March 31, 2024, undiscounted future rental obligations to be paid under the long-term ground leases by Penney Intermediate Holdings LLC under the terms of the Master Lease on behalf of the Trust, including fixed rental increases, for the next five years and thereafter, are as follows: Lease Obligations Period from April 1 to December 31, 2024 $ 3,089 2025 4,116 2026 4,138 2027 4,197 2028 4,257 Thereafter 215,902 Less imputed interest (197,932) Lease liabilities as of March 31, 2024 $ 37,767 |
ORGANIZATION AND FINANCIAL ST_3
ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION (Details) $ in Thousands, ft² in Millions | 3 Months Ended | |||
Jan. 30, 2021 property lease distributionCenter shares | Mar. 31, 2024 USD ($) ft² state property | Mar. 31, 2023 USD ($) | Dec. 31, 2021 warehouse | |
Real Estate [Line Items] | ||||
Number of master leases | lease | 2 | |||
Number of real estate properties encumbered | property | 21 | |||
Number of states operated in | state | 35 | |||
Square feet of leasable space | ft² | 17 | |||
Trust certificates issued (in shares) | shares | 75,000,000 | |||
Related party, annual service fee | $ 100 | |||
General and administrative expenses | $ 1,523 | $ 1,839 | ||
Management agreement term | 24 months | |||
Management agreement automatic renewal term | 6 months | |||
Base management fee percentage | 5.75% | |||
Base management fee, monthly amount | $ 333 | |||
Base management fees | 1,477 | 1,475 | ||
Base management fees payable | 490 | 491 | ||
Asset management fees | 88 | $ 15 | ||
Related Party | ||||
Real Estate [Line Items] | ||||
General and administrative expenses | $ 25 | |||
Retail | ||||
Real Estate [Line Items] | ||||
Number of real estate properties | property | 160 | 127 | ||
Warehouse | ||||
Real Estate [Line Items] | ||||
Number of real estate properties | distributionCenter | 6 | |||
Number of real estate properties sold, cumulative | warehouse | 6 |
INVESTMENT PROPERTIES - Additio
INVESTMENT PROPERTIES - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Mar. 15, 2024 USD ($) | Mar. 22, 2023 USD ($) | Mar. 31, 2024 USD ($) state property | Mar. 31, 2023 USD ($) | Sep. 30, 2023 | Dec. 31, 2023 USD ($) property | Jan. 30, 2021 property | |
Real Estate Properties [Line Items] | |||||||
Number of states operated in | state | 35 | ||||||
Acquired lease intangible assets, net, accumulated amortization | $ 38,821 | $ 36,373 | |||||
Acquired lease intangible liabilities, accumulated amortization | $ 16,609 | $ 15,969 | |||||
Weighted average amortization period for acquired lease intangible assets and liabilities | 16 years 9 months 18 days | 17 years | |||||
Aggregate Proceeds, Net | $ 16,096 | $ 7,196 | |||||
Gain on sales of investment properties, net | 1,348 | 828 | |||||
Selling expenses | 2 | ||||||
Provision for impairment of investment properties | $ 0 | $ 0 | |||||
Number of properties held for sale | property | 0 | 0 | |||||
Transnational Portfolio | |||||||
Real Estate Properties [Line Items] | |||||||
Aggregate Proceeds, Net | $ 16,096 | ||||||
Escrow amount | $ 1,348 | ||||||
Gain on sales of investment properties, net | $ 1,502 | 1,502 | |||||
Selling expenses | 154 | ||||||
Queens, NY | |||||||
Real Estate Properties [Line Items] | |||||||
Escrow amount | 1,326 | ||||||
Temecula, CA | |||||||
Real Estate Properties [Line Items] | |||||||
Aggregate Proceeds, Net | $ 5,869 | 5,869 | |||||
Escrow amount | 828 | ||||||
Gain on sales of investment properties, net | $ (496) | $ (496) | |||||
Retail | |||||||
Real Estate Properties [Line Items] | |||||||
Number of real estate properties | property | 127 | 160 |
INVESTMENT PROPERTIES - Amortiz
INVESTMENT PROPERTIES - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Acquired lease intangible assets, net | |||
Period from April 1 to December 31, 2024 | $ 9,195 | ||
2025 | 12,259 | ||
2026 | 12,259 | ||
2027 | 12,259 | ||
2028 | 12,259 | ||
Thereafter | 147,110 | ||
Total | 205,341 | $ 212,001 | |
Acquired below market lease intangibles | |||
Period from April 1 to December 31, 2024 | 3,934 | ||
2025 | 5,245 | ||
2026 | 5,245 | ||
2027 | 5,245 | ||
2028 | 5,245 | ||
Thereafter | 62,941 | ||
Total | 87,855 | $ 93,078 | |
Amortization of below market lease intangibles | 1,349 | $ 1,406 | |
Above market lease intangibles | |||
Acquired lease intangible assets, net | |||
Period from April 1 to December 31, 2024 | 5,663 | ||
2025 | 7,550 | ||
2026 | 7,550 | ||
2027 | 7,550 | ||
2028 | 7,550 | ||
Thereafter | 90,606 | ||
Total | 126,469 | ||
Acquired below market lease intangibles | |||
Amortization of lease intangible assets | 1,910 | 1,957 | |
In-place lease value intangibles | |||
Acquired lease intangible assets, net | |||
Period from April 1 to December 31, 2024 | 3,532 | ||
2025 | 4,709 | ||
2026 | 4,709 | ||
2027 | 4,709 | ||
2028 | 4,709 | ||
Thereafter | 56,504 | ||
Total | 78,872 | ||
Acquired below market lease intangibles | |||
Amortization of lease intangible assets | $ 1,190 | $ 1,214 |
INVESTMENT PROPERTIES - Disposi
INVESTMENT PROPERTIES - Dispositions (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 15, 2024 USD ($) ft² | Mar. 22, 2023 USD ($) ft² | Mar. 31, 2024 USD ($) ft² | Mar. 31, 2023 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Aggregate Proceeds, Net | $ 16,096 | $ 7,196 | ||
Gain on sales of investment properties, net | 1,348 | $ 828 | ||
Transnational Portfolio | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Square Footage | ft² | 302 | |||
Gross Sales Proceeds | $ 16,459 | |||
Aggregate Proceeds, Net | 16,096 | |||
Gain on sales of investment properties, net | $ 1,502 | $ 1,502 | ||
Temecula, CA | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Square Footage | ft² | 125 | 125 | ||
Gross Sales Proceeds | $ 6,000 | $ 6,000 | ||
Aggregate Proceeds, Net | 5,869 | 5,869 | ||
Gain on sales of investment properties, net | $ (496) | $ (496) |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 USD ($) lease | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Jan. 30, 2021 lease | |
Leases [Abstract] | ||||
Master lease, term | 20 years | |||
Master lease, percent rent abatement in first year | 50% | |||
Annual increase in base rent at the beginning of the third lease year | 2% | |||
Ground lease reimbursement income | $ 1,035 | $ 1,012 | ||
Lease payments received in advance | 8,470 | $ 8,583 | ||
Sales and use taxes | $ 160 | $ 186 | ||
Lessor, weighted average remaining lease terms | 16 years 9 months 18 days | |||
Weighted average remaining lease terms | 43 years 1 month 6 days | |||
Weighted average incremental borrowing rate, lessee | 11% | |||
Number of lease contracts | lease | 21 | 23 |
LEASES - Lease Income (Details)
LEASES - Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Lease Income, Fixed And Variable [Abstract] | ||
Fixed lease income | $ 25,184 | $ 25,653 |
Variable lease income | 504 | 0 |
Straight-line rental income, net | (580) | (590) |
Ground lease reimbursement income | 1,035 | 1,012 |
Other | ||
Amortization of above and below market leases | (561) | (551) |
Lease income | $ 25,582 | $ 25,524 |
LEASES - Undiscounted Lease Pay
LEASES - Undiscounted Lease Payments to be Received (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Leases [Abstract] | |
Period from April 1 to December 31, 2024 | $ 74,738 |
2025 | 99,651 |
2026 | 99,651 |
2027 | 99,651 |
2028 | 99,651 |
Thereafter | 1,195,813 |
Total | $ 1,669,155 |
LEASES - Components of ground l
LEASES - Components of ground lease rent expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Real Estate [Line Items] | ||
Amortization of below market lease intangibles | $ 1,349 | $ 1,406 |
Ground lease rent expense | 1,495 | 1,495 |
Ground lease | ||
Real Estate [Line Items] | ||
Amortization of below market lease intangibles | 365 | 365 |
Amortization of right-of-use assets | 252 | 254 |
Interest expense | 1,038 | 1,036 |
Above market lease intangibles | ||
Real Estate [Line Items] | ||
Amortization of above market ground lease intangibles | (1,910) | (1,957) |
Above market lease intangibles | Ground lease | ||
Real Estate [Line Items] | ||
Amortization of above market ground lease intangibles | $ (160) | $ (160) |
LEASES - Undiscounted Future Re
LEASES - Undiscounted Future Rental Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
Period from April 1 to December 31, 2024 | $ 3,089 | |
2025 | 4,116 | |
2026 | 4,138 | |
2027 | 4,197 | |
2028 | 4,257 | |
Thereafter | 215,902 | |
Less imputed interest | (197,932) | |
Lease liabilities | $ 37,767 | $ 37,763 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jan. 30, 2021 property | Mar. 31, 2024 USD ($) property state | Mar. 31, 2023 state | Dec. 31, 2023 USD ($) property | |
Real Estate [Line Items] | ||||
Go dark/substitution properties allocated base rent as a percentage of total base rent | 15% | |||
Number of states operated in | state | 35 | |||
Concentration risk, number of states | state | 2 | 2 | ||
Unrecognized tax benefits | $ | $ 0 | $ 0 | ||
Geographic Concentration Risk | Lease Income | California | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 19.10% | 19% | ||
Geographic Concentration Risk | Lease Income | Texas | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 13.20% | 13.50% | ||
Retail | ||||
Real Estate [Line Items] | ||||
Number of properties subject to termination rights by lessor | 23 | 7 | ||
Termination rights by lessor, written notice period | 24 months | |||
Number of properties subject to termination rights by lessor, in any lease year | 8 | |||
Number of properties sold | 16 | |||
Number of properties subject to termination rights by lessee, sold | 0 | 5 | ||
Number of properties subject to termination rights by lessee | 6 | |||
Number of properties subject to termination rights by lessee, in any lease year | 5 | |||
Number of properties subject to lockout period | 70 | |||
Properties with tenant purchase rights, sold, cumulative | 18 | |||
Properties with tenant purchase rights, purchased by tenant, cumulative | 3 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |
May 10, 2024 | Apr. 30, 2024 | |
Subsequent Event [Line Items] | ||
Distribution | $ 7,684 | $ 23,599 |
Distribution (usd per share) | $ 0.10 | $ 0.31 |