Real Estate Dispositions, Held for Sale and Impairment Charges |
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| Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Dispositions, Held for Sale and Impairment Charges | Real Estate Dispositions, Held for Sale and Impairment Charges Real Estate Dispositions
We did not sell any properties during the six months ended June 30, 2022. We expect to continue to execute our capital recycling plan and sell non-core properties as reasonable disposition opportunities become available, and use the sales proceeds to acquire properties in our target, secondary growth markets, or pay down outstanding debt. During the six months ended June 30, 2021, we sold two non-core properties, located in Rancho Cordova, California and Champaign, Illinois.
The table below summarizes the components of operating income from the real estate and related assets disposed of during the three and six months ended June 30, 2021 (dollars in thousands):
(1)Includes a $0.9 million loss on sale of real estate, net, on two property sales.
Real Estate Held for Sale
At June 30, 2022, we had three properties classified as held for sale, located in Parsippany, New Jersey, Jupiter, Florida, and Columbus, Ohio. We consider these assets to be non-core to our long term strategy. At December 31, 2021, we did not have any properties classified as held for sale.
The table below summarizes the components of the assets and liabilities held for sale at June 30, 2022 reflected on the accompanying condensed consolidated balance sheets (dollars in thousands):
Impairment Charges
We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the six months ended June 30, 2022 and did not identify any impaired assets. We evaluated our held for sale assets to determine if any of these assets were impaired during the six months ended June 30, 2022, and identified one held for sale asset, located in Parsippany, New Jersey, which was impaired by $1.4 million. In performing our held for sale assessment, the carrying value of this asset was above the fair value, less costs of sale. As a result, we impaired this property to equal the fair market value less costs of sale. We did not recognize an impairment charge during the six months ended June 30, 2021.
Fair market value for this asset was calculated using Level 3 inputs (defined in Note 6 “Mortgage Notes Payable and Credit Facility”), which were determined using a negotiated sales price from an executed purchase and sale agreement with a third party. We continue to evaluate our properties on a quarterly basis for changes that could create the need to record impairment. Future impairment losses may result, and could be significant, should market conditions deteriorate in the markets in which we hold our assets or should we be unable to secure leases at terms that are favorable to us, which could impact the estimated cash flow of our properties over the period in which we plan to hold our properties. Additionally, changes in management’s decisions to either own and lease long-term or sell a particular asset will have an impact on this analysis.
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