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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                 
Commission File Number: 001-36008
Rexford Industrial Realty, Inc.
(Exact name of registrant as specified in its charter) 
 
Maryland46-2024407
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
11620 Wilshire Boulevard, Suite 1000Los AngelesCalifornia90025
(Address of principal executive offices)(Zip Code)
(310) 966-1680
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolsName of each exchange on which registered
Common Stock, $0.01 par value REXRNew York Stock Exchange
5.875% Series B Cumulative Redeemable Preferred StockREXR-PBNew York Stock Exchange
5.625% Series C Cumulative Redeemable Preferred StockREXR-PCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
The number of shares of common stock outstanding at July 20, 2023 was 206,441,741.



REXFORD INDUSTRIAL REALTY, INC.
QUARTERLY REPORT FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023
TABLE OF CONTENTS
 
PART I 
  
  
  
  
  
  
  
 
 
 
PART II. 
 
 
 
 
 
 
 
 

2


PART I. FINANCIAL INFORMATION
 
Item 1.        Financial Statements

REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands – except share and per share data)
 June 30, 2023December 31, 2022
ASSETS  
Land$6,400,698 $5,841,195 
Buildings and improvements3,723,837 3,370,494 
Tenant improvements155,182 147,632 
Furniture, fixtures and equipment132 132 
Construction in progress127,416 110,934 
Total real estate held for investment10,407,265 9,470,387 
Accumulated depreciation(695,129)(614,332)
Investments in real estate, net9,712,136 8,856,055 
Cash and cash equivalents136,282 36,786 
Rents and other receivables, net14,126 15,227 
Deferred rent receivable, net103,192 88,144 
Deferred leasing costs, net54,848 45,080 
Deferred loan costs, net4,139 4,829 
Acquired lease intangible assets, net147,990 169,986 
Acquired indefinite-lived intangible5,156 5,156 
Interest rate swap asset19,869 11,422 
Other assets19,055 24,973 
Acquisition related deposits8,700 1,625 
Total Assets$10,225,493 $9,259,283 
LIABILITIES & EQUITY  
Liabilities  
Notes payable$2,227,154 $1,936,381 
Accounts payable, accrued expenses and other liabilities109,881 97,496 
Dividends and distributions payable79,370 62,033 
Acquired lease intangible liabilities, net130,511 147,384 
Tenant security deposits81,163 71,935 
Prepaid rents42,600 20,712 
Total Liabilities2,670,679 2,335,941 
Equity  
Rexford Industrial Realty, Inc. stockholders’ equity  
Preferred stock, $0.01 par value per share, 10,050,000 shares authorized:
5.875% series B cumulative redeemable preferred stock, 3,000,000 shares outstanding at June 30, 2023 and December 31, 2022 ($75,000 liquidation preference)
72,443 72,443 
5.625% series C cumulative redeemable preferred stock, 3,450,000 shares outstanding at June 30, 2023 and December 31, 2022 ($86,250 liquidation preference)
83,233 83,233 
Common Stock, $0.01 par value per share, 489,950,000 authorized and 201,041,741 and 189,114,129 shares outstanding at June 30, 2023 and December 31, 2022, respectively
2,010 1,891 
Additional paid-in capital7,311,458 6,646,867 
Cumulative distributions in excess of earnings(298,367)(255,743)
Accumulated other comprehensive income16,525 8,247 
Total stockholders’ equity7,187,302 6,556,938 
Noncontrolling interests367,512 366,404 
Total Equity7,554,814 6,923,342 
Total Liabilities and Equity$10,225,493 $9,259,283 
The accompanying notes are an integral part of these consolidated financial statements.
3


REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands – except share and per share data)

 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
REVENUES   
Rental income$194,098 $148,987 $379,262 $289,575 
Management and leasing services171 130 361 293 
Interest income1,497 1 2,379 2 
TOTAL REVENUES195,766 149,118 382,002 289,870 
OPERATING EXPENSES
Property expenses44,310 35,405 87,135 68,834 
General and administrative18,267 14,863 36,464 29,580 
Depreciation and amortization58,793 46,609 118,222 89,080 
TOTAL OPERATING EXPENSES121,370 96,877 241,821 187,494 
OTHER EXPENSES  
Other expenses306 295 953 333 
Interest expense17,180 10,168 30,881 19,851 
TOTAL EXPENSES138,856 107,340 273,655 207,678 
Loss on extinguishment of debt (877) (877)
Gains on sale of real estate  12,133 8,486 
NET INCOME56,910 40,901 120,480 89,801 
 Less: net income attributable to noncontrolling interests(2,717)(2,290)(5,781)(4,774)
NET INCOME ATTRIBUTABLE TO REXFORD INDUSTRIAL REALTY, INC.54,193 38,611 114,699 85,027 
 Less: preferred stock dividends(2,315)(2,315)(4,629)(4,629)
 Less: earnings allocated to participating securities (318)(203)(638)(404)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS$51,560 $36,093 $109,432 $79,994 
Net income attributable to common stockholders per share - basic$0.26 $0.22 $0.55 $0.49 
Net income attributable to common stockholders per share - diluted$0.26 $0.22 $0.55 $0.49 
Weighted average shares of common stock outstanding - basic200,610,890 164,895,701 198,003,415 162,774,059 
Weighted average shares of common stock outstanding - diluted200,667,250 165,200,577 198,237,614 163,136,372 
 
The accompanying notes are an integral part of these consolidated financial statements.
4


REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited and in thousands)
 
 
Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Net income$56,910 $40,901 $120,480 $89,801 
Other comprehensive income (loss): cash flow hedge adjustments13,895 716 8,553 7,167 
Comprehensive income70,805 41,617 129,033 96,968 
Comprehensive income attributable to noncontrolling interests(3,204)(2,306)(6,056)(5,041)
Comprehensive income attributable to Rexford Industrial Realty, Inc.
$67,601 $39,311 $122,977 $91,927 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
5


REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands – except share data) 
 
Preferred StockNumber of Common
Shares
Common
Stock
Additional
Paid-in Capital
Cumulative Distributions in Excess of EarningsAccumulated
Other
Comprehensive Income
Total
Stockholders’
Equity
Noncontrolling
Interests
Total Equity
Balance at March 31, 2023$155,676 200,784,130 $2,008 $7,299,837 $(273,849)$3,117 $7,186,789 $371,521 $7,558,310 
Share-based compensation— 11,837  1,947 — — 1,947 6,279 8,226 
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock— (731)— (40)— — (40)— (40)
Conversion of OP Units to common stock— 246,505 2 9,714 — — 9,716 (9,716) 
Net income2,315 — — — 51,878 — 54,193 2,717 56,910 
Other comprehensive income— — — — — 13,408 13,408 487 13,895 
Preferred stock dividends ($0.367188 per series B preferred share and $0.351563 per series C preferred share)
(2,315)— — — — — (2,315)— (2,315)
Preferred unit distributions— — — — — — — (802)(802)
Common stock dividends ($0.38 per common share)
— — — — (76,396)— (76,396)— (76,396)
Common unit distributions— — — — — — — (2,974)(2,974)
Balance at June 30, 2023$155,676 201,041,741 $2,010 $7,311,458 $(298,367)$16,525 $7,187,302 $367,512 $7,554,814 

The accompanying notes are an integral part of these consolidated financial statements.

6



REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Unaudited and in thousands – except share data) 
 Preferred StockNumber of Common
Shares
Common
Stock
Additional
Paid-in Capital
Cumulative Distributions in Excess of EarningsAccumulated
Other
Comprehensive
(Loss) Income
Total
Stockholders’
Equity
Noncontrolling
Interests
Total Equity
Balance at March 31, 2022$155,676 165,017,587 $1,650 $5,133,875 $(198,999)$(3,674)$5,088,528 $299,232 $5,387,760 
Issuance of common stock— 5,967,783 60 425,350 — — 425,410 — 425,410 
Offering costs— — — (6,339)— — (6,339)— (6,339)
Issuance of OP Units— — — — — — — 56,167 56,167 
Share-based compensation— 13,827  1,457 — — 1,457 5,049 6,506 
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock— (136)— (10)— — (10)— (10)
Conversion of OP Units to common stock— 65,358 1 2,486 — — 2,487 (2,487) 
Net income2,315 — — — 36,296 — 38,611 2,290 40,901 
Other comprehensive income— — — — — 700 700 16 716 
Preferred stock dividends ($0.367188 per series B preferred share and $0.351563 per series C preferred share)
(2,315)— — — — — (2,315)— (2,315)
Preferred unit distributions— — — — — — — (798)(798)
Common stock dividends ($0.315 per common share)
— — — — (53,885)— (53,885)— (53,885)
Common unit distributions— — — — — — — (2,415)(2,415)
Balance at June 30, 2022$155,676 171,064,419 $1,711 $5,556,819 $(216,588)$(2,974)$5,494,644 $357,054 $5,851,698 

The accompanying notes are an integral part of these consolidated financial statements.

7


REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Unaudited and in thousands – except share data) 
Preferred StockNumber of Common
Shares
Common
Stock
Additional
Paid-in Capital
Cumulative Distributions in Excess of EarningsAccumulated
Other
Comprehensive
Income
Total
Stockholders’
Equity
Noncontrolling
Interests
Total Equity
Balance at December 31, 2022$155,676 189,114,129 $1,891 $6,646,867 $(255,743)$8,247 $6,556,938 $366,404 $6,923,342 
Issuance of common stock— 11,504,656 115 656,544 — — 656,659 — 656,659 
Offering costs— — — (4,062)— — (4,062)— (4,062)
Share-based compensation— 189,685 2 3,533 — — 3,535 13,064 16,599 
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock— (30,012)— (1,788)— — (1,788)— (1,788)
Conversion of OP units to common stock— 263,283 2 10,364 — — 10,366 (10,366) 
Net income4,629 — — — 110,070 — 114,699 5,781 120,480 
Other comprehensive income— — — — — 8,278 8,278 275 8,553 
Preferred stock dividends ($0.734376 per series B preferred share and $0.703126 per series C preferred share)
(4,629)— — — — — (4,629)— (4,629)
Preferred unit distributions— — — — — — — (1,604)(1,604)
Common stock dividends ($0.76 per common share)
— — — — (152,694)— (152,694)— (152,694)
Common unit distributions— — — — — — — (6,042)(6,042)
Balance at June 30, 2023$155,676 201,041,741 $2,010 $7,311,458 $(298,367)$16,525 $7,187,302 $367,512 $7,554,814 

The accompanying notes are an integral part of these consolidated financial statements.

8


 REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Unaudited and in thousands – except share data) 

 
 Preferred StockNumber of Common
Shares
Common
Stock
Additional
Paid-in Capital
Cumulative Distributions in Excess of EarningsAccumulated
Other
Comprehensive
(Loss) Income
Total
Stockholders’
Equity
Noncontrolling
Interests
Total Equity
Balance at December 31, 2021$155,676 160,511,482 $1,605 $4,828,292 $(191,120)$(9,874)$4,784,579 $283,116 $5,067,695 
Issuance of common stock— 10,369,893 104 735,919 — — 736,023 — 736,023 
Offering costs— — — (11,246)— — (11,246)— (11,246)
Issuance of OP Units— — — — — — — 56,167 56,167 
Issuance of 3.00% cumulative redeemable convertible preferred units
— — — — — — — 12,000 12,000 
Share-based compensation— 125,114 1 2,654 — — 2,655 10,026 12,681 
Shares acquired to satisfy employee tax withholding requirements on vesting restricted stock— (29,238)— (2,025)— — (2,025)— (2,025)
Conversion of units to common stock— 87,168 1 3,225 — — 3,226 (3,226) 
Net income4,629 — — — 80,398 — 85,027 4,774 89,801 
Other comprehensive income— — — — — 6,900 6,900 267 7,167 
Preferred stock dividends ($0.734376 per series B preferred share and $0.703126 per series C preferred share)
(4,629)— — — — — (4,629)— (4,629)
Preferred unit distributions— — — — — — — (1,521)(1,521)
Common stock dividends ($0.63 per share)
— — — — (105,866)— (105,866)— (105,866)
Common unit distributions— — — — — — — (4,549)(4,549)
Balance at June 30, 2022$155,676 171,064,419 $1,711 $5,556,819 $(216,588)$(2,974)$5,494,644 $357,054 $5,851,698 
 
The accompanying notes are an integral part of these consolidated financial statements.

9


REXFORD INDUSTRIAL REALTY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
 Six Months Ended June 30,
  20232022
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income$120,480 $89,801 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization118,222 89,080 
Amortization of (below) above market lease intangibles, net(14,522)(11,217)
Amortization of debt issuance costs1,855 1,083 
Amortization of discount (premium) on notes payable, net269 123 
Impairment of right-of-use asset188  
Loss on extinguishment of debt 877 
Gains on sale of real estate(12,133)(8,486)
Equity based compensation expense16,134 12,394 
Straight-line rent(16,281)(15,342)
Payments for termination/settlement of interest rate derivatives(161)(589)
Amortization related to termination/settlement of interest rate derivatives265 274 
Change in working capital components:  
Rents and other receivables1,112 1,987 
Deferred leasing costs(10,401)(3,140)
Other assets5,865 5,636 
Accounts payable, accrued expenses and other liabilities(1,660)(607)
Tenant security deposits1,342 3,641 
Prepaid rents(7,885)(2,608)
Net cash provided by operating activities202,689 162,907 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Acquisition of investments in real estate(811,162)(992,482)
Capital expenditures(92,086)(55,217)
Payments for deposits on real estate acquisitions, net(8,700)(17,850)
Proceeds from sale of real estate16,239 15,315 
Net cash used in investing activities(895,709)(1,050,234)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Issuance of common stock, net652,597 724,777 
Proceeds from borrowings646,925 1,252,000 
Repayment of borrowings(354,544)(991,185)
Debt issuance costs(3,042)(5,513)
Dividends paid to preferred stockholders(4,629)(4,629)
Dividends paid to common stockholders(135,868)(90,504)
Distributions paid to common unitholders(5,531)(3,754)
Distributions paid to preferred unitholders(1,604)(1,521)
Repurchase of common shares to satisfy employee tax withholding requirements(1,788)(2,025)
Net cash provided by financing activities792,516 877,646 
Increase (decrease) in cash, cash equivalents and restricted cash99,496 (9,681)
Cash, cash equivalents and restricted cash, beginning of period36,786 43,998 
Cash, cash equivalents and restricted cash, end of period$136,282 $34,317 
Supplemental disclosure of cash flow information:  
Cash paid for interest (net of capitalized interest of $9,874 and $4,402 for the six months ended June 30, 2023 and 2022, respectively)
$26,908 $18,482 
Supplemental disclosure of noncash transactions:  
Operating lease right-of-use assets obtained in exchange for lease liabilities$ $6,363 
Issuance of OP Units in connection with acquisition of real estate$ $56,167 
Issuance of 3.00% cumulative redeemable convertible preferred units in connection with acquisition of real estate
$ $12,000 
Accrual for capital expenditures$38,977 $16,420 
Accrual of dividends and distributions$79,370 $56,300 
The accompanying notes are an integral part of these consolidated financial statements.
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REXFORD INDUSTRIAL REALTY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.    Organization
    Rexford Industrial Realty, Inc. is a self-administered and self-managed full-service real estate investment trust (“REIT”) focused on owning and operating industrial properties in Southern California infill markets. We were formed as a Maryland corporation on January 18, 2013, and Rexford Industrial Realty, L.P. (the “Operating Partnership”), of which we are the sole general partner, was formed as a Maryland limited partnership on January 18, 2013. Through our controlling interest in our Operating Partnership and its subsidiaries, we own, manage, lease, acquire and redevelop industrial real estate principally located in Southern California infill markets, and, from time to time, acquire or provide mortgage debt secured by industrial property.  As of June 30, 2023, our consolidated portfolio consisted of 365 properties with approximately 44.2 million rentable square feet.
    The terms “us,” “we,” “our,” and the “Company” as used in these financial statements refer to Rexford Industrial Realty, Inc. and, unless the context requires otherwise, its subsidiaries (including our Operating Partnership).
 2.    Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
As of June 30, 2023 and December 31, 2022, and for the three and six months ended June 30, 2023 and 2022, the financial statements presented are the consolidated financial statements of Rexford Industrial Realty, Inc. and its subsidiaries, including our Operating Partnership. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.
Under consolidation guidance, we have determined that our Operating Partnership is a variable interest entity because the holders of limited partnership interests do not have substantive kick-out rights or participating rights. Furthermore, we are the primary beneficiary of the Operating Partnership because we have the obligation to absorb losses and the right to receive benefits from the Operating Partnership and the exclusive power to direct the activities of the Operating Partnership. As of June 30, 2023 and December 31, 2022, the assets and liabilities of the Company and the Operating Partnership are substantially the same, as the Company does not have any significant assets other than its investment in the Operating Partnership.
The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The interim financial statements should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022 and the notes thereto.
Any references to the number of properties and square footage are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.  
Cash and Cash Equivalents
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short-term maturity of these investments.
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Restricted Cash
Restricted cash is comprised of escrow reserves that we are required to set aside for future costs as required by certain agreements with our lenders, and from time to time, includes cash proceeds from property sales that are being held by qualified intermediaries for purposes of facilitating tax-deferred like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”).
Restricted cash balances are included with cash and cash equivalents balances as of the beginning and ending of each period presented in the consolidated statements of cash flows. The following table provides a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the six months ended June 30, 2023 and 2022 (in thousands):
Six Months Ended June 30,
20232022
Cash and cash equivalents$36,786 $43,987 
Restricted cash 11 
Cash, cash equivalents and restricted cash, beginning of period$36,786 $43,998 
Cash and cash equivalents$136,282 $34,317 
Restricted cash  
Cash, cash equivalents and restricted cash, end of period$136,282 $34,317 
Investments in Real Estate
Acquisitions
We account for acquisitions of properties under Accounting Standards Update (“ASU”) 2017-01, Business Combinations - Clarifying the Definition of a Business, which provides a framework for determining whether transactions should be accounted for as acquisitions of assets or businesses and further revises the definition of a business. Our acquisitions of properties generally no longer meet the revised definition of a business and accordingly are accounted for as asset acquisitions.
For asset acquisitions, we allocate the cost of the acquisition, which includes cash and non-cash consideration paid to the seller and associated acquisition transaction costs, to the individual assets acquired and liabilities assumed on a relative fair value basis. These individual assets and liabilities typically include land, building and improvements, tenant improvements, intangible assets and liabilities related to above- and below-market leases, intangible assets related to in-place leases, and from time to time, assumed mortgage debt. As there is no measurement period concept for an asset acquisition, the allocated cost of the acquired assets is finalized in the period in which the acquisition occurs.
We determine the fair value of the tangible assets of an acquired property by valuing the property as if it was vacant.  This “as-if vacant” value is estimated using an income, or discounted cash flow, approach that relies upon Level 3 inputs, which are unobservable inputs based on the Company’s assumptions with respect to the assumptions a market participant would use.  These Level 3 inputs include discount rates, capitalization rates, market rental rates, rental growth rates and comparable sales data, including land sales, for similar properties.  Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions.  In determining the “as-if-vacant” value for the properties we acquired during the six months ended June 30, 2023, we used discount rates ranging from 6.00% to 9.50% and exit capitalization rates ranging from 4.75% to 7.75%.
In determining the fair value of intangible lease assets or liabilities, we also consider Level 3 inputs.  Acquired above- and below-market leases are valued based on the present value of the difference between prevailing market rental rates and the in-place rental rates measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases, if applicable.  The estimated fair value of acquired in-place at-market tenant leases are the estimated costs that would have been incurred to lease the property to the occupancy level of the property at the date of acquisition. We consider estimated costs such as the value associated with leasing commissions, legal and other costs, as well as the estimated period of time necessary to lease such a property to its occupancy level at the time of its acquisition. In determining the fair value of acquisitions completed during the six months ended June 30, 2023, we used an estimated average lease-up period ranging from six months to eighteen months.
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The difference between the fair value and the face value of debt assumed, if any, in connection with an acquisition is recorded as a premium or discount and amortized to “interest expense” over the life of the debt assumed. The valuation of assumed liabilities is based on our estimate of the current market rates for similar liabilities in effect at the acquisition date.
Demolition costs incurred in conjunction with the acquisition of real estate are capitalized as part of the cost of the acquisition if the demolition (i) is contemplated as part of the acquisition and (ii) occurs within a reasonable period of time after the acquisition. If demolition was not contemplated as part of the acquisition or the demolition does not occur within a reasonable period of time after the acquisition, the costs of the demolition are expensed as incurred.
Capitalization of Costs
We capitalize direct costs incurred in developing, renovating, rehabilitating and improving real estate assets as part of the investment basis. This includes certain general and administrative costs, including payroll, bonus and non-cash equity compensation of the personnel performing redevelopment, renovations and rehabilitation if such costs are identifiable to a specific activity to get the real estate asset ready for its intended use. During the redevelopment and construction periods of a project, we also capitalize interest, real estate taxes and insurance costs. We cease capitalization of costs upon substantial completion of the project, but no later than one year from cessation of major construction activity. If some portions of a project are substantially complete and ready for use and other portions have not yet reached that stage, we cease capitalizing costs on the completed portion of the project but continue to capitalize for the incomplete portion of the project. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred.
We capitalized interest costs of $4.9 million and $2.4 million during the three months ended June 30, 2023 and 2022, respectively, and $9.9 million and $4.4 million during the six months ended June 30, 2023 and 2022, respectively. We capitalized real estate taxes and insurance costs aggregating $1.5 million and $1.3 million during the three months ended June 30, 2023 and 2022, respectively, and $3.1 million and $2.3 million during the six months ended June 30, 2023 and 2022, respectively. We capitalized compensation costs for employees who provide construction services of $2.7 million and $2.1 million during the three months ended June 30, 2023 and 2022, respectively, and $5.2 million and $4.1 million during the six months ended June 30, 2023 and 2022, respectively.
Depreciation and Amortization
Real estate, including land, building and land improvements, tenant improvements, furniture, fixtures and equipment and intangible lease assets and liabilities are stated at historical cost less accumulated depreciation and amortization, unless circumstances indicate that the cost cannot be recovered, in which case, the carrying value of the property is reduced to estimated fair value as discussed below in our policy with regard to impairment of long-lived assets. We estimate the depreciable portion of our real estate assets and related useful lives in order to record depreciation expense.
The values allocated to buildings, site improvements, in-place lease intangibles and tenant improvements are depreciated on a straight-line basis using an estimated useful life that typically ranges from 10-30 years for buildings, 5-25 years for site improvements, and the shorter of the estimated useful life or respective lease term for in-place lease intangibles and tenant improvements.
As discussed above in—Investments in Real Estate—Acquisitions, in connection with property acquisitions, we may acquire leases with rental rates above or below the market rental rates. Such differences are recorded as an acquired lease intangible asset or liability and amortized to “rental income” over the remaining term of the related leases.
Our estimate of the useful life of our assets is evaluated upon acquisition and when circumstances indicate that a change in the useful life has occurred, which requires significant judgment regarding the economic obsolescence of tangible and intangible assets.
Assets Held for Sale
We classify a property as held for sale when all of the criteria set forth in the Accounting Standards Codification (“ASC”) Topic 360: Property, Plant and Equipment (“ASC 360”) have been met. The criteria are as follows: (i) management, having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. At the time we classify a property as held for sale, we cease recording depreciation and amortization. A property classified as held for sale is measured and reported at the lower of its carrying
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amount or its estimated fair value less cost to sell. As of June 30, 2023 and December 31, 2022, we did not have any properties classified as held for sale.
Impairment of Long-Lived Assets
In accordance with the provisions of the Impairment or Disposal of Long-Lived Assets Subsections of ASC 360, we assess the carrying values of our respective long-lived assets, including operating lease right-of-use assets (“ROU assets”), whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of real estate assets and other long-lived assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows.
To review real estate assets for recoverability, we consider current market conditions as well as our intent with respect to holding or disposing of the asset. The intent with regards to the underlying assets might change as market conditions and other factors change. For office space ROU assets, the execution of a sublease where the remaining lease payments of the original office space lease exceed the sublease receipts reflects an indication of impairment which suggests the carrying value of the ROU asset may not be recoverable. Fair value is determined through various valuation techniques, including discounted cash flow models, applying a capitalization rate to estimated net operating income of a property, quoted market values and third-party appraisals, where considered necessary. The use of projected future cash flows is based on assumptions that are consistent with estimates of future expectations and the strategic plan used to manage our underlying business.
If our analysis indicates that the carrying value of the real estate asset and other long-lived assets is not recoverable on an undiscounted cash flow basis, we will recognize an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property.
Assumptions and estimates used in the recoverability analyses for future cash flows, discount rates and capitalization rates are complex and subjective. Changes in economic and operating conditions or our intent with respect to our investment that occur subsequent to our impairment analyses could impact these assumptions and result in future impairment of our real estate properties. During the three and six months ended June 30, 2023 and 2022, there were no impairment charges recorded to the carrying value of our properties. In connection with the early termination of a sublease for one of our office space leases in February 2023, we recorded a $0.2 million impairment charge during the first quarter of 2023 to reduce the carrying value of the related ROU asset. The impairment charge is presented in “Other expenses” in the consolidated statements of operations. See also “Note 6 – Leases” for details.
Income Taxes
We have elected to be taxed as a REIT under the Code commencing with our initial taxable year ended December 31, 2013. To qualify as a REIT, we are required (among other things) to distribute at least 90% of our REIT taxable income to our stockholders and meet the various other requirements imposed by the Code relating to matters such as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our activities. If we fail to qualify as a REIT in any taxable year and were unable to avail ourselves of certain savings provisions set forth in the Code, all of our taxable income would be subject to regular federal corporate income tax, including any applicable alternative minimum tax on our taxable income.
We own and may acquire direct or indirect interests in one or more entities that have elected or will elect to be taxed as REITs under the Code (each, a “Subsidiary REIT”). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to us. If a Subsidiary REIT were to fail to qualify as a REIT, then (i) that Subsidiary REIT would become subject to regular federal corporate income tax, (ii) shares in such Subsidiary REIT would cease to be qualifying assets for purposes of the asset tests applicable to REITs, and (iii) it is possible that we would fail certain of the asset tests applicable to REITs, in which event we would fail to qualify as a REIT unless we could avail ourselves of certain relief provisions.
We are subject to taxation by various state and local jurisdictions, including those in which we transact business or reside. Other than our Subsidiary REIT (a private REIT acquired on July 18, 2022), our non-taxable subsidiaries, including our Operating Partnership, are either partnerships or disregarded entities for federal income tax purposes. Under applicable federal and state income tax rules, the allocated share of net income or loss from disregarded entities and flow-through entities such as partnerships is reportable in the income tax returns of the respective equity holders. Our taxable REIT subsidiary is a C-corporation subject to federal and state income tax. However, it has a cumulative unrecognized net operating loss carryforward. Accordingly, no income tax provision is included in the accompanying consolidated financial statements for the three and six months ended June 30, 2023 and 2022.
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We periodically evaluate our tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of June 30, 2023, and December 31, 2022, we have not established a liability for uncertain tax positions.
Derivative Instruments and Hedging Activities
We are exposed to certain risks arising from both our business operations and economic conditions.  We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources and duration of our debt funding and through the use of derivative financial instruments.  Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  Our derivative financial instruments are used to manage differences in the amount, timing and duration of our known or expected cash payments principally related to our borrowings.
In accordance with ASC Topic 815: Derivatives and Hedging, we record all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, and whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional value. From time to time, we also utilize cash flow hedges to lock U.S. Treasury rates in anticipation of future fixed-rate debt issuances (“treasury rate lock agreements”). The gains or losses resulting from changes in fair value of derivatives that qualify as cash flow hedges are recognized in accumulated other comprehensive income/(loss) (“AOCI”). Upon the termination of a derivative for which cash flow hedging was being applied, the balance, which was recorded in AOCI, is amortized to interest expense over the remaining contractual term of the derivative as long as the hedged forecasted transactions continue to be probable of occurring. Upon the settlement of treasury rate lock agreements, amounts remaining in AOCI are amortized through earnings over the underlying term of the hedged transaction. Cash payments made to terminate or settle interest rate derivatives are presented in cash flows provided by operating activities in the accompanying consolidated statements of cash flows, given the nature of the underlying cash flows that the derivative was hedging. See “Note 7 – Interest Rate Derivatives” for details.
Revenue Recognition
Our primary sources of income are rental income, management and leasing services and gains on sale of real estate.
Rental Income
We lease industrial space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum annual lease payments are recognized in rental income on a straight-line basis over the term of the related lease, regardless of when payments are contractually due, when collectability is probable. Rental revenue recognition commences when the tenant takes possession of or controls the physical use of the leased space. Lease termination fees, which are included in rental income, are recognized when the related leases are canceled and we have no continuing obligation to provide services to such former tenants.
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Our lease agreements with tenants generally contain provisions that require tenants to reimburse us for certain property expenses. Estimated reimbursements from tenants for these property expenses, which include real estate taxes, insurance, common area maintenance and other recoverable operating expenses, are recognized as revenues in the period that the expenses are incurred. Subsequent to year-end, we perform final reconciliations on a lease-by-lease basis and bill or credit each tenant for any cumulative annual adjustments. As the timing and pattern of revenue recognition is the same and as the lease component would be classified as an operating lease if it were accounted for separately, rents and tenant reimbursements are treated as a combined lease component and presented as a single line item “Rental income” in our consolidated statements of operations.
We record revenues and expenses on a gross basis for lessor costs (which include real estate taxes) when these costs are reimbursed to us by our tenants. Conversely, we record revenues and expenses on a net basis for lessor costs when they are paid by our tenants directly to the taxing authorities on our behalf.
Management and leasing services
We provide property management services and leasing services to related party and third-party property owners, the customer, in exchange for fees and commissions. Property management services include performing property inspections, monitoring repairs and maintenance, negotiating vendor contracts, maintaining tenant relations and providing financial and accounting oversight. For these services, we earn monthly management fees, which are based on a fixed percentage of each managed property’s monthly tenant cash receipts. We have determined that control over the services is passed to the customer simultaneously as performance occurs. Accordingly, management fee revenue is earned as the services are provided to our customers.
Leasing commissions are earned when we provide leasing services that result in an executed lease with a tenant. We have determined that control over the services is transferred to the customer upon execution of each lease agreement. We earn leasing commissions based on a fixed percentage of rental income generated for each executed lease agreement and there is no variable income component.
Gain or Loss on Sale of Real Estate
We account for dispositions of real estate properties, which are considered nonfinancial assets, in accordance with ASC 610-20: Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets and recognize a gain or loss on sale of real estate upon transferring control of the nonfinancial asset to the purchaser, which is generally satisfied at the time of sale. If we were to conduct a partial sale of real estate by transferring a controlling interest in a nonfinancial asset, while retaining a noncontrolling ownership interest, we would measure any noncontrolling interest received or retained at fair value, and recognize a full gain or loss. If we receive consideration before transferring control of a nonfinancial asset, we recognize a contract liability. If we transfer control of the asset before consideration is received, we recognize a contract asset.
When leases contain purchase options, we assess the probability that the tenant will execute the purchase option both at lease commencement and at the time the tenant communicates its intent to exercise the purchase option. If we determine the exercise of the purchase option is reasonably certain, we will account for the lease as a sales-type lease and derecognize the associated real estate assets on our balance sheet and record a gain or loss on sale of real estate.
Valuation of Operating Lease Receivables    
We may be subject to tenant defaults and bankruptcies that could affect the collection of outstanding receivables related to our operating leases, including deferred rent receivables arising from straight-line recognition of rental income. In order to mitigate these risks, we perform credit reviews and analyses on prospective tenants before significant leases are executed and on existing tenants before properties are acquired. On a quarterly basis, we perform an assessment of the collectability of operating lease receivables on a tenant-by-tenant basis, which includes reviewing the age and nature of our receivables, the payment history and financial condition of the tenant, our assessment of the tenant’s ability to meet its lease obligations and the status of negotiations of any disputes with the tenant. Any changes in the collectability assessment for an operating lease is recognized as an adjustment, which can be a reduction or increase, to rental income in the consolidated statements of operations. As a result of our quarterly collectability assessments, we recognized $1.2 million as a net reduction adjustment and $0.2 million as a net increase adjustment to rental income for the three months ended June 30, 2023 and 2022, respectively, and $1.6 million as a net reduction adjustment and $0.2 million as a net increase adjustment to rental income for the six months ended June 30, 2023 and 2022, respectively, in the consolidated statements of operations.
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Deferred Leasing Costs
We capitalize the incremental direct costs of originating a lease that would not have been incurred had the lease not been executed. As a result, deferred leasing costs will generally only include third-party broker commissions.
Debt Issuance Costs
Debt issuance costs related to a recognized debt liability are presented in the balance sheet as a reduction from the carrying value of the debt liability. This offset against the debt liability is treated similarly to a debt discount, which effectively reduces the proceeds of a borrowing. For line of credit arrangements, we present debt issuance costs as an asset and amortize the cost over the term of the line of credit arrangement. See “Note 5 – Notes Payable” for details.
Equity Based Compensation
We account for equity-based compensation in accordance with ASC Topic 718: Compensation - Stock Compensation.  Total compensation cost for all share-based awards is based on the estimated fair market value of the equity instrument issued on the grant date. For share-based awards that vest based solely on a service condition, we recognize compensation cost on a straight-line basis over the total requisite service period for the entire award.  For share-based awards that vest based on a market condition, we recognize compensation cost on a straight-line basis over the requisite service period of each separately vesting tranche.  For share-based awards that vest based on a performance condition, we recognize compensation cost based on the number of awards that are expected to vest based on the probable outcome of the performance condition. Compensation cost for these awards will be adjusted to reflect the number of awards that ultimately vest. Forfeitures are recognized in the period in which they occur. See “Note 12 – Incentive Award Plan” for details.
Equity Offerings
Underwriting commissions and offering costs incurred in connection with common stock offerings and our at-the-market equity offering programs have been reflected as a reduction of additional paid-in capital. Underwriting commissions and offering costs related to our preferred stock issuances have been reflected as a direct reduction of the preferred stock balance.
Under relevant accounting guidance, sales of our common stock under forward equity sale agreements (as discussed in “Note 11 – Equity”) are not deemed to be liabilities, and furthermore, meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments based on the following assessment: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.
Earnings Per Share
We calculate earnings per share (“EPS”) in accordance with ASC 260: Earnings Per Share (“ASC 260”). Under ASC 260, unvested share-based payment awards that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the computation of basic EPS pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends declared (or accumulated) and their respective participation rights in undistributed earnings.
Basic EPS is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period.
    Diluted EPS is calculated by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding determined for the basic EPS computation plus the potential effect of any dilutive securities including shares issuable under forward equity sale agreements and unvested share-based awards under the treasury stock method. We include unvested shares of restricted stock and unvested LTIP units in the computation of diluted EPS by using the more dilutive of the two-class method or treasury stock method. We include unvested performance units as contingently issuable shares in the computation of diluted EPS once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period. Any anti-dilutive securities are excluded from the diluted EPS calculation. See “Note 13 – Earnings Per Share” for details.
Segment Reporting
Management views the Company as a single reportable segment based on its method of internal reporting in addition to its allocation of capital and resources.
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Leases as a Lessee
We determine if an arrangement is a lease at inception. Operating lease ROU assets are included in “Other assets” and lease liabilities are included in “Accounts payable, accrued expenses and other liabilities” in our consolidated balance sheets. ROU assets represent our right to use, or control the use of, a specified asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Because our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is generally recognized on a straight-line basis over the term of the lease through the amortization of the ROU asset and lease liabilities. Additionally, for our operating leases, we do not separate non-lease components, such as common area maintenance, from associated lease components. See “Note 6 – Leases” for additional lessee disclosures required under lease accounting standards.
Recent Accounting Pronouncements (Issued and Not Yet Adopted)
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that contractual sale restrictions are not considered in measuring the fair value of equity securities, and requires specific disclosures for all entities with equity securities subject to a contractual sale restriction including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. In addition, ASU 2022-03 prohibits an entity from recognizing a contractual sale as a separate unit of account. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the potential impact of adopting ASU 2022-03.
3.    Investments in Real Estate
Acquisitions
The following table summarizes the wholly-owned properties we acquired during the six months ended June 30, 2023: 
PropertySubmarketDate of AcquisitionRentable Square FeetNumber of Buildings
Contractual Purchase Price(1)
(in thousands)
16752 Armstrong AvenueOrange County - Airport1/6/202381,600 1 $40,000 
10545 Production AvenueSan Bernardino - Inland Empire West1/30/20231,101,840 1 365,000 
3520 Challenger StreetLos Angeles - South Bay2/28/202349,336 1 14,200 
9000 Airport Boulevard(2)
Los Angeles - South Bay3/28/202338,680 1 143,000 
9223-33 & 9323 Balboa Avenue and 4285 Ponderosa Avenue(3)
San Diego - Central3/30/2023515,382 5 200,000 
13925 Benson AvenueSan Bernardino - Inland Empire West4/7/202338,143 1 27,500 
19301 Santa Fe AvenueLos Angeles - South Bay4/14/202341,638 3 14,600 
2395-2399 Bateman AvenueLos Angeles - San Gabriel Valley4/21/2023134,9523 41,203 
Total 2023 Property Acquisitions2,001,571 16 $845,503 
(1)Represents the gross contractual purchase price before certain credits, prorations, closing costs and other acquisition related costs. Including $4.2 million of capitalized closing costs and acquisition related costs, the total aggregate initial investment was $849.7 million. Each acquisition was funded with available cash on hand unless otherwise noted.
(2)Represents the acquisition of 18.4 acres of industrial zoned land.
(3)Represents the acquisition of three properties in one consolidated transaction.
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    The following table summarizes the fair value of amounts allocated to each major class of asset and liability for the acquisitions noted in the table above, as of the date of each acquisition (in thousands):
 2023 Acquisitions
Assets:
Land$565,124 
Buildings and improvements278,442 
Tenant improvements3,025 
Acquired lease intangible assets(1)
3,088 
Other acquired assets(2)
909 
Total assets acquired$850,588 
Liabilities:
Other assumed liabilities(3)
$37,801 
Total liabilities assumed$37,801 
Net assets acquired$812,787 
(1)Acquired lease intangible assets is comprised of (i) $3.0 million of in-place lease intangibles with a weighted average amortization period of 5.2 years and (ii) $0.1 million of above-market lease intangibles with a weighted average amortization period of 5.2 years.
(2)Includes other working capital assets acquired at the time of acquisition.
(3)Includes $29.6 million of prepaid rent paid by seller/tenants in sale-leaseback transactions and other liabilities assumed at the time of acquisition.
Dispositions
The following table summarizes information related to the property that was sold during the six months ended June 30, 2023.
PropertySubmarketDate of DispositionRentable Square Feet
Contractual Sales Price(1)
(in thousands)
Gain Recorded
(in thousands)
8101-8117 Orion Ave.Los Angeles - San Fernando Valley3/28/202348,394 $17,000 $12,133 
(1)Represents the gross contractual sales price before commissions, prorations, credits and other closing costs.
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4.    Acquired Lease Intangibles  
    The following table summarizes our acquired lease intangible assets, including the value of in-place tenant leases, above-market tenant leases and a below-market ground lease, and our acquired lease intangible liabilities which includes below-market tenant leases (in thousands): 
 June 30, 2023December 31, 2022
Acquired Lease Intangible Assets:  
In-place lease intangibles$313,039 $315,842 
Accumulated amortization(189,848)(172,883)
In-place lease intangibles, net$123,191 $142,959 
Above-market tenant leases$25,598 $26,851 
Accumulated amortization(13,564)(12,671)
Above-market tenant leases, net$12,034 $14,180 
Below-market ground lease$12,977 $12,977 
Accumulated amortization(212)(130)
Below-market ground lease, net$12,765 $12,847 
Acquired lease intangible assets, net$147,990 $169,986 
Acquired Lease Intangible Liabilities:  
Below-market tenant leases$(217,450)$(220,646)
Accumulated accretion86,939 73,262 
Below-market tenant leases, net$(130,511)$(147,384)
Acquired lease intangible liabilities, net$(130,511)$(147,384)
    The following table summarizes the amortization related to our acquired lease intangible assets and liabilities for the three and six months ended June 30, 2023 and 2022 (in thousands):
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
In-place lease intangibles(1)
$11,754 $10,160 $22,733 $18,298 
Net below-market tenant leases(2)
$(6,273)$(6,168)$(14,604)$(11,265)
Below-market ground leases(3)
$41 $41 $82 $48 
(1)The amortization of in-place lease intangibles is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented.
(2)The amortization of net below-market tenant leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented.
(3)The amortization of net below-market ground lease is recorded as an increase to property expenses in the consolidated statements of operations for the periods presented.
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5.    Notes Payable
    The following table summarizes the components and significant terms of our indebtedness as of June 30, 2023 and December 31, 2022 (dollars in thousands):
 June 30, 2023December 31, 2022Margin Above SOFR
Interest Rate(1)
 
Contractual
Maturity Date
 
Unsecured and Secured Debt
Unsecured Debt:
Revolving Credit Facility$ $ S+0.685 %
(2)
5.875 %
(3)
5/26/2026
(4)
$400M Term Loan400,000 400,000 S+0.760 %
(2)
4.832 %
(5)
7/19/2024
(4)
$100M Senior Notes100,000 100,000 n/a4.290 %
 
8/6/2025
$300M Term Loan300,000 300,000 S+0.760 %
(2)
3.677 %
(6)
5/26/2027
$125M Senior Notes125,000 125,000 n/a3.930 %7/13/2027
$300M Senior Notes due 2028300,000  n/a5.000 %6/15/2028
$25M Series 2019A Senior Notes25,000 25,000 n/a3.880 %