What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-08-05 · 229 added, 170 removed, 710 unchanged (36% of the section changed)

3 unchanged sentences

($ in thousands, except share and per share data)

September 30,

2022 December 31,

21 unchanged sentences

219,098,394 and 218,949,569 shares issued and outstanding at

June 30, 2022 and December 31, 2021, respectively

September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 4,903,773 4,898,673

9 unchanged sentences

($ in thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

15 unchanged sentences

Equity in earnings (loss) of unconsolidated subsidiaries 144 ( 196 ) ( 56 ) ( 758 )

Other (expense) income, net ( 162 ) 227 ( 265 ) 19

Net income (loss) 13,445 ( 95 ) ( 3,381 ) 25,259

Other income (expense), net 58 168 ( 207 ) 189

Net (loss) income ( 7,721 ) ( 6,828 ) ( 11,102 ) 18,433

Net income attributable to noncontrolling interests ( 116 ) ( 132 ) ( 408 ) ( 1,058 )

Net income (loss) attributable to common shareholders $ 13,131 $ ( 242 ) $ ( 3,673 ) $ 24,333

Net income (loss) per common share – basic and diluted $ 0.06 $ 0.00 $ ( 0.02 ) $ 0.29

Net (loss) income attributable to common shareholders $ ( 7,837 ) $ ( 6,960 ) $ ( 11,510 ) $ 17,375

Net (loss) income per common share – basic $ ( 0.04 ) $ ( 0.08 ) $ ( 0.05 ) $ 0.21

Net (loss) income per common share – diluted $ ( 0.04 ) $ ( 0.08 ) $ ( 0.05 ) $ 0.20

Weighted average common shares outstanding – basic 219,103,669 84,556,689 219,053,320 84,468,519

1 unchanged sentence

Dividends declared per common share $ 0.21 $ 0.18 $ 0.60 $ 0.50

Net income (loss) $ 13,445 $ ( 95 ) $ ( 3,381 ) $ 25,259

Net (loss) income $ ( 7,721 ) $ ( 6,828 ) $ ( 11,102 ) $ 18,433

Change in fair value of derivatives 33,131 1,919 89,628 8,653

26 unchanged sentences

Balance at June 30, 2022 219,100,998 $ 2,191 $ 4,900,986 $ 39,957 $ ( 1,051,994 ) $ 3,891,140

Stock compensation activity ( 2,604 ) — 2,881 — — 2,881

Other comprehensive income — — — 32,736 — 32,736

Distributions declared to common shareholders — — — — ( 46,014 ) ( 46,014 )

Net loss attributable to common shareholders — — — — ( 7,837 ) ( 7,837 )

Adjustment to redeemable noncontrolling interests — — ( 94 ) — — ( 94 )

Balances, September 30, 2022 219,098,394 $ 2,191 $ 4,903,773 $ 72,693 $ ( 1,105,845 ) $ 3,872,812

Balance at December 31, 2020 84,187,999 $ 842 $ 2,085,003 $ ( 30,885 ) $ ( 824,306 ) $ 1,230,654

14 unchanged sentences

Balance at June 30, 2021 84,546,649 $ 845 $ 2,064,310 $ ( 24,354 ) $ ( 827,326 ) $ 1,213,475

Stock compensation activity 2,254 — 1,989 — — 1,989

Other comprehensive income — — — 1,878 — 1,878

Distributions to common shareholders — — — — ( 15,221 ) ( 15,221 )

Net loss attributable to common shareholders — — — — ( 6,960 ) ( 6,960 )

Exchange of redeemable noncontrolling interests for common shares 26,538 1 536 — — 537

Adjustment to redeemable noncontrolling interests — — 3,148 — — 3,148

Balance at September 30, 2021 84,575,441 $ 846 $ 2,069,983 $ ( 22,476 ) $ ( 849,507 ) $ 1,198,846

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

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

21 unchanged sentences

Distribution from unconsolidated joint venture 1,144 —

Net cash provided by (used in) investing activities 68,646 ( 99,466 )

Capital contribution to unconsolidated joint venture ( 125 ) —

Net cash used in investing activities ( 13,694 ) ( 109,063 )

Cash flows from financing activities:

18 unchanged sentences

(in thousands, except unit data)

September 30,

2022 December 31,

21 unchanged sentences

Common equity, 219,098,394 and 218,949,569 units issued and outstanding

at June 30, 2022 and December 31, 2021, respectively

at September 30, 2022 and December 31, 2021, respectively

3,800,119 3,937,949

9 unchanged sentences

(in thousands, except unit and per unit data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

15 unchanged sentences

Equity in earnings (loss) of unconsolidated subsidiaries 144 ( 196 ) ( 56 ) ( 758 )

Other (expense) income, net ( 162 ) 227 ( 265 ) 19

Net income (loss) 13,445 ( 95 ) ( 3,381 ) 25,259

Other income (expense), net 58 168 ( 207 ) 189

Net (loss) income ( 7,721 ) ( 6,828 ) ( 11,102 ) 18,433

Net income attributable to noncontrolling interests ( 209 ) ( 132 ) ( 535 ) ( 396 )

Net income (loss) attributable to common unitholders $ 13,263 $ ( 227 ) $ ( 3,707 ) $ 24,995

Allocation of net income (loss):

Net (loss) income attributable to common unitholders $ ( 7,930 ) $ ( 6,960 ) $ ( 11,637 ) $ 18,037

Allocation of net (loss) income:

Limited Partners $ ( 93 ) $ — $ ( 127 ) $ 662

1 unchanged sentence

$ ( 7,930 ) $ ( 6,960 ) $ ( 11,637 ) $ 18,037

Net income (loss) per common unit – basic and diluted $ 0.06 $ 0.00 $ ( 0.02 ) $ 0.29

Net (loss) income per common unit – basic and diluted $ ( 0.04 ) $ ( 0.08 ) $ ( 0.05 ) $ 0.21

Weighted average common units outstanding – basic 222,059,366 87,003,748 221,791,428 86,951,170

1 unchanged sentence

Distributions declared per common unit $ 0.21 $ 0.18 $ 0.60 $ 0.50

Net income (loss) $ 13,445 $ ( 95 ) $ ( 3,381 ) $ 25,259

Net (loss) income $ ( 7,721 ) $ ( 6,828 ) $ ( 11,102 ) $ 18,433

Change in fair value of derivatives 33,131 1,919 89,628 8,653

26 unchanged sentences

Balance at June 30, 2022 $ 3,851,183 $ 39,957 $ 3,891,140

Stock compensation activity 2,881 — 2,881

Other comprehensive income attributable to Parent Company — 32,736 32,736

Distributions declared to Parent Company ( 46,014 ) — ( 46,014 )

Net loss attributable to Parent Company ( 7,837 ) — ( 7,837 )

Adjustment to redeemable noncontrolling interests ( 94 ) — ( 94 )

Balance at September 30, 2022 $ 3,800,119 $ 72,693 $ 3,872,812

Balance at December 31, 2020 $ 1,261,539 $ ( 30,885 ) $ 1,230,654

14 unchanged sentences

Balance at June 30, 2021 $ 1,237,829 $ ( 24,354 ) $ 1,213,475

Stock compensation activity 1,989 — 1,989

Other comprehensive income attributable to Parent Company — 1,878 1,878

Distributions declared to Parent Company ( 15,221 ) — ( 15,221 )

Net loss attributable to Parent Company ( 6,960 ) — ( 6,960 )

Conversion of Limited Partner Units to shares of the Parent Company 537 — 537

Adjustment to redeemable noncontrolling interests 3,148 — 3,148

Balance at September 30, 2021 $ 1,221,322 $ ( 22,476 ) $ 1,198,846

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

3 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

21 unchanged sentences

Distribution from unconsolidated joint venture 1,144 —

Net cash provided by (used in) investing activities 68,646 ( 99,466 )

Capital contribution to unconsolidated joint venture ( 125 ) —

Net cash used in investing activities ( 13,694 ) ( 109,063 )

Cash flows from financing activities:

17 unchanged sentences

Notes to Consolidated Financial Statements

June 30, 2022

September 30, 2022

($ in thousands, except share, per share, unit and per unit amounts and where indicated in millions or billions)

6 unchanged sentences

We believe the Company qualifies as a real estate investment trust (“REIT”) under provisions of the Internal Revenue Code of 1986, as amended.

The Parent Company is the sole general partner of the Operating Partnership, and as of June 30, 2022 owned approximately 98.7 % of the common partnership interests in the Operating Partnership (“General Partner Units”).

The Parent Company is the sole general partner of the Operating Partnership, and as of September 30, 2022 owned approximately 98.7 % of the common partnership interests in the Operating Partnership (“General Partner Units”).

The remaining 1.3 % of the common partnership interests (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”) were owned by the limited partners.

5 unchanged sentences

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 such rules and regulations, although management believes that the disclosures are adequate to make the presentation not misleading.

The unaudited financial statements as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 include all adjustments, consisting of normal recurring adjustments, necessary in the opinion of management to present fairly the financial information set forth therein.

The unaudited financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 include all adjustments, consisting of normal recurring adjustments, necessary in the opinion of management to present fairly the financial information set forth therein.

The consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the combined Annual Report on Form 10-K of the Parent Company and the Operating Partnership for the year ended December 31, 2021.

10 unchanged sentences

In connection with the Merger, the Operating Partnership issued an equivalent amount of General Partner Units to the Parent Company.

As of June 30, 2022, we owned interests in 181 operating retail properties totaling approximately 28.8 million square feet and one office property with 0.3 million square feet.

As of September 30, 2022, we owned interests in 183 operating retail properties totaling approximately 28.9 million square feet and one office property with 0.3 million square feet.

Of the 183 operating retail properties, 11 contain an office component.

We also owned five development projects under construction as of this date.

We also owned four development projects under construction as of this date.

Of the 183 operating retail properties, 180 are consolidated in these financial statements and the remaining three are accounted for under the equity method.

1 unchanged sentence

Components of Investment Properties

The following table summarizes the composition of the Company’s investment properties as of June 30, 2022 and December 31, 2021:

The following table summarizes the composition of the Company’s investment properties as of September 30, 2022 and December 31, 2021:

Balance as of

($ in thousands) June 30, 2022 December 31, 2021

($ in thousands) September 30, 2022 December 31, 2021

Land, buildings and improvements $ 7,639,490 $ 7,543,376

3 unchanged sentences

Components of Rental Income including Allowance for Uncollectible Accounts

Rental income related to the Company’s operating leases is comprised of the following for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, Six Months Ended June 30,

Rental income related to the Company’s operating leases is comprised of the following for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended

September 30, Nine Months Ended

September 30,

($ in thousands) 2022 2021 2022 2021

1 unchanged sentence

Variable lease payments – operating leases 36,636 12,461 112,725 38,540

Bad debt reserve ( 1,171 ) ( 61 ) ( 1,742 ) ( 1,370 )

Bad debt (reserve) recovery ( 1,882 ) 1,709 ( 3,624 ) 338

Straight-line rent adjustments 4,328 585 12,951 1,109

Straight-line rent reserve for uncollectibility ( 202 ) 658 ( 264 ) 547

Straight-line rent (reserve) recovery for uncollectibility ( 34 ) 39 ( 298 ) 587

Amortization of in-place lease liabilities, net 1,228 528 3,143 1,428

4 unchanged sentences

Short-Term Deposits

During the three months ended June 30, 2022, the Company used the proceeds from a $ 125.0 million short-term deposit that matured on April 7, 2022 to repay borrowings on the Company’s revolving line of credit.

During the nine months ended September 30, 2022, the Company used the proceeds from a $ 125.0 million short-term deposit that matured on April 7, 2022 to repay borrowings on the Company’s revolving line of credit.

The deposit balance was held in a custody account at Bank of New York Mellon and earned interest at a rate of the Federal Funds Rate plus 43 basis points.

Interest income on the deposit is recorded within “Other expense, net” on the accompanying consolidated statements of operations and comprehensive income.

Interest income on the deposit is recorded within “Other income (expense), net” on the accompanying consolidated statements of operations and comprehensive income.

Consolidation and Investments in Joint Ventures

Operating Partnership that are controlled and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary.

As of June 30, 2022, we owned investments in three consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.

As of June 30, 2022, these consolidated VIEs had mortgage debt of $ 28.7 million, which were secured by assets of the VIEs totaling $ 117.8 million.

The accompanying financial statements are presented on a consolidated basis and include all accounts of the Parent Company, the Operating Partnership, the taxable REIT subsidiaries (“TRSs”) of the Operating Partnership, subsidiaries of the Operating Partnership that are controlled and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary.

As of September 30, 2022, we owned investments in three consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary.

As of September 30, 2022, these consolidated VIEs had mortgage debt of $ 28.5 million, which were secured by assets of the VIEs totaling $ 118.9 million.

The Operating Partnership guarantees the mortgage debt of these VIEs.

28 unchanged sentences

We report the non-redeemable noncontrolling interests in subsidiaries as equity, and the amount of consolidated net income attributable to these noncontrolling interests is set forth separately in the consolidated financial statements.

The following table summarizes the non-redeemable noncontrolling interests in consolidated properties for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

The following table summarizes the non-redeemable noncontrolling interests in consolidated properties for the nine months ended September 30, 2022 and 2021:

Nine Months Ended September 30,

($ in thousands) 2022 2021

1 unchanged sentence

Net income allocable to noncontrolling interests, excluding redeemable noncontrolling interests 139 —

Noncontrolling interests balance as of June 30, $ 5,208 $ 698

Noncontrolling interests balance as of September 30,

$ 5,285 $ 698

Noncontrolling Interests – Joint Venture

1 unchanged sentence

The Company owns 90 % of the joint venture.

As of June 30, 2022, the Company has funded $ 0.9 million of the partner’s development costs related to One Loudoun Downtown – Pads G & H through a loan provided by the Company to the joint venture.

As of September 30, 2022, the Company has funded $ 0.9 million of the partner’s development costs related to One Loudoun Downtown – Pads G & H through a loan provided by the Company to the joint venture.

The loan is secured by the joint venture project, is required to be repaid subsequent to the completion of construction and stabilization of the project and is eliminated upon consolidation.

2 unchanged sentences

The Company is considered the primary beneficiary as it has a controlling financial interest in the joint venture.

As such, the Company has consolidated this joint venture and presented the joint venture partners’ interests as noncontrolling interests.

As such, the Company has consolidated this joint venture and presented the joint venture partner’s interests as noncontrolling interests.

Redeemable Noncontrolling Interests – Limited Partners

2 unchanged sentences

The carrying amount of the redeemable noncontrolling interests in the Operating Partnership is reflected at the greater of historical book value or redemption value with a corresponding adjustment to additional paid-in capital.

As of June 30, 2022, the redemption value of the redeemable noncontrolling interests in the Operating Partnership did not exceed the historical book value, and the balances were accordingly adjusted to historical book value.

As of September 30, 2022, the redemption value of the redeemable noncontrolling interests in the Operating Partnership did not exceed the historical book value, and the balances were accordingly adjusted to historical book value.

As of December 31, 2021, the redemption value of the redeemable noncontrolling interests in the Operating Partnership exceeded the historical book value, and the balances were accordingly adjusted to redemption value.

2 unchanged sentences

This adjustment is reflected in our shareholders’ and Parent Company’s equity.

For the three and six months ended June 30, 2022 and 2021, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:

For the three and nine months ended September 30, 2022 and 2021, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

1 unchanged sentence

Limited partners’ weighted average interests in Operating Partnership 1.3 % 2.8 % 1.2 % 2.9 %

At June 30, 2022, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.7 % and 1.3 %.

At September 30, 2022, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.7 % and 1.3 %.

At December 31, 2021, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.9 % and 1.1 %.

4 unchanged sentences

The Parent Company also has the right to redeem the Limited Partner Units directly from the limited partner in exchange for either cash in the amount specified above or a number of its common shares equal to the number of Limited Partner Units being redeemed.

There were 2,955,697 and 2,377,777 Limited Partner Units outstanding as of June 30, 2022 and December 31, 2021, respectively.

There were 2,955,697 and 2,377,777 Limited Partner Units outstanding as of September 30, 2022 and December 31, 2021, respectively.

The increase in Limited Partner Units outstanding from December 31, 2021 is due to non-cash compensation awards made to our executive officers in the form of Limited Partner Units.

2 unchanged sentences

(“Inland Diversified”) in 2014, Inland Diversified formed joint ventures with the previous owners of certain properties and issued Class B units in three joint ventures that indirectly own those properties.

The Class B units related to one of these three joint ventures remain outstanding and are accounted for as noncontrolling interests in the remaining venture.

The remaining Class B units will become redeemable at the respective partner’s election in October 2022 and the fulfillment of certain redemption criteria.

Beginning in November 2022, the Class B units can be redeemed at the election of either our partner or us for cash or Limited Partner Units in the Operating Partnership.

The Class B units do not have a maturity date, and none are mandatorily redeemable unless either party has elected for the units to be redeemed.

We consolidate this joint venture because we control the decision-making and our joint venture partner has limited protective rights.

We classify the redeemable noncontrolling interests related to the remaining Class B units in the accompanying consolidated balance sheets outside of permanent equity because, under certain circumstances, we may be required to pay cash to Class B unitholders in this subsidiary upon redemption of their interests.

As of September 30, 2022, the Class B units related to one of these joint ventures that owned Crossing at Killingly Commons, our multi-tenant retail property in Dayville, Connecticut, was outstanding and accounted for as noncontrolling interests in the remaining venture.

In October 2022, the remaining Class B units became redeemable at the partner’s election and the fulfillment of certain redemption criteria for cash or Limited Partner Units in the Operating Partnership.

In October 2022, we received notice from our joint venture partner of its exercise of their right to redeem the remaining Class B units for cash in the amount of $ 9.7 million, which redemption was funded using cash on October 3, 2022.

Prior to the redemption, the Class B units did not have a maturity date and were not mandatorily redeemable unless either party had elected for the units to be redeemed.

Prior to the redemption, we consolidated this joint venture because we controlled the decision-making and our joint venture partner had limited protective rights.

We classify the redeemable noncontrolling interests related to the remaining Class B units in the accompanying consolidated balance sheets outside of permanent equity because, under certain circumstances, we may be required to pay cash to the Class B unitholders in this subsidiary upon redemption of their interests.

The carrying amount of these redeemable noncontrolling interests is required to be reflected at the greater of initial book value or redemption value with a corresponding adjustment to additional paid-in capital.

As of June 30, 2022 and December 31, 2021, the redemption amounts of these interests did not exceed their fair value nor did they exceed the initial book value.

The redeemable noncontrolling interests in the Operating Partnership and subsidiaries for the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended June 30,

As of September 30, 2022 and December 31, 2021, the redemption amounts of these interests did not exceed their fair value nor did they exceed the initial book value.

The redeemable noncontrolling interests in the Operating Partnership and subsidiaries for the nine months ended September 30, 2022 and 2021 were as follows:

Nine Months Ended September 30,

($ in thousands) 2022 2021

4 unchanged sentences

Total limited partners’ interests in Operating Partnership and other

redeemable noncontrolling interests balance as of June 30,

redeemable noncontrolling interests balance as of September 30,

$ 56,954 $ 53,281

2 unchanged sentences

Total limited partners’ interests in Operating Partnership and other

redeemable noncontrolling interests balance as of June 30,

redeemable noncontrolling interests balance as of September 30,

$ 56,954 $ 53,281

6 unchanged sentences

The inputs are unobservable in the market and significant to the valuation estimate.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level

input that is significant to the fair value measurement in its entirety.

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

3 unchanged sentences

In March 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Interbank Offered Rate (“LIBOR”)-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

During the nine months ended September 30, 2022, the Company elected to apply additional expedients related to contract modifications, changes in critical terms, and updates to the designated hedged risks as qualifying changes have been made to applicable debt and derivative contracts.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

23 unchanged sentences

As a result of the Merger, the Company acquired 100 operating retail properties and five development projects under construction along with multiple parcels of entitled land for future value creation.

During the six months ended June 30, 2022, the Company incurred $ 0.9 million of merger and acquisition costs consisting primarily of professional fees and technology

costs, which are recorded within “Merger and acquisition costs” in the accompanying consolidated statements of operations and comprehensive income.

During the nine months ended September 30, 2022, the Company incurred $ 1.0 million of merger and acquisition costs consisting primarily of professional fees and technology costs, which are recorded within “Merger and acquisition costs” in the accompanying consolidated statements of operations and comprehensive income.

In addition, the Company assumed approximately $ 1.8 billion of debt in connection with the Merger.

“Rental income” and “Net income attributable to common shareholders” in the accompanying consolidated statements of operations and comprehensive income include revenues from the RPAI portfolio of $ 126.7 million and $ 250.3 million and net income (loss) of $ 10.7 million and $( 10.2 ) million for the three months and six months ended June 30, 2022, respectively, which includes $ 88.3 million and $ 181.2 million of depreciation and amortization, respectively, as a result of the Merger.

“Rental income” and “Net income attributable to common shareholders” in the accompanying consolidated statements of operations and comprehensive income include revenues from the RPAI portfolio of $ 124.7 million and $ 375.0 million and net loss of $ 7.1 million and $ 17.3 million for the three months and nine months ended September 30, 2022, respectively, which includes $ 84.0 million and $ 265.2 million of depreciation and amortization, respectively, as a result of the Merger.

Purchase Price Allocation

45 unchanged sentences

Pro Forma Financial Information (unaudited)

The pro forma financial information set forth below is based upon the Company’s historical consolidated statements of operations for the three and six months ended June 30, 2021, adjusted to give effect for the properties assumed through the Merger as if they were acquired as of January 1, 2021.

The pro forma financial information set forth below is based upon the Company’s historical consolidated statements of operations for the three and nine months ended September 30, 2021, adjusted to give effect for the properties assumed through the Merger as if they were acquired as of January 1, 2021.

The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of income would have been, nor does it purport to represent the results of income for future periods.

($ in thousands) Three Months Ended

June 30, 2021 Six Months Ended

June 30, 2021

September 30, 2021 Nine Months Ended

September 30, 2021

Rental income $ 190,908 $ 560,423

5 unchanged sentences

Asset Acquisitions

The Company closed on the following asset acquisitions during the six months ended June 30, 2022:

The Company closed on the following asset acquisitions during the nine months ended September 30, 2022:

Date Property Name Metropolitan

3 unchanged sentences

April 13, 2022 MacArthur Crossing Dallas Two-tenant building 56,077 21,920

July 15, 2022 Palms Plaza Miami Multi-tenant retail 68,976 35,750

210,849 $ 101,770

1 unchanged sentence

Substantially all of the purchase price was allocated to investment properties.

The Company did not acquire any properties during the six months ended June 30, 2021.

During the six months ended June 30, 2022, the Company sold Plaza Del Lago, a 100,016 square foot multi-tenant retail property located in the Chicago MSA, for a sales price of $ 58.7 million and a net gain of $ 24.0 million.

The Company did not acquire any properties during the nine months ended September 30, 2021.

During the nine months ended September 30, 2022, the Company sold Plaza Del Lago, a 100,016 square foot multi-tenant retail property located in the Chicago MSA, for a sales price of $ 58.7 million and a net gain of $ 24.0 million.

Plaza Del Lago also contains 8,800 square feet of residential space comprised of 18 multifamily rental units.

In addition, the Company sold a portion of Hamilton Crossing Centre, a redevelopment property located in the Indianapolis MSA, for a sales price of $ 6.9 million and a net gain of $ 3.2 million during the six months ended June 30, 2022.

During the six months ended June 30, 2021, the Company sold 16 ground leases for gross proceeds of $ 40.0 million and a net gain of $ 26.2 million.

During the nine months ended September 30, 2021, the Company sold 17 ground leases for gross proceeds of $ 42.0 million and a net gain of $ 27.6 million.

A portion of the proceeds was used to pay down our unsecured revolving line of credit .

2 unchanged sentences

Deferred leasing costs, lease intangibles and similar costs are amortized on a straight-line basis over the terms of the related leases.

As of June 30, 2022 and December 31, 2021, deferred costs consisted of the following:

($ in thousands) June 30, 2022 December 31, 2021

As of September 30, 2022 and December 31, 2021, deferred costs consisted of the following:

($ in thousands) September 30, 2022 December 31, 2021

Acquired lease intangible assets $ 539,730 $ 567,149

6 unchanged sentences

The amounts of such amortization included in the accompanying consolidated statements of operations are as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

($ in thousands) 2022 2021

5 unchanged sentences

Tenant rent payments received in advance are recognized as revenue in the period to which they apply, which is typically the month following their receipt.

As of June 30, 2022 and December 31, 2021, deferred revenue, intangibles, net and other liabilities consisted of the following:

($ in thousands) June 30, 2022 December 31, 2021

As of September 30, 2022 and December 31, 2021, deferred revenue, intangibles, net and other liabilities consisted of the following:

($ in thousands) September 30, 2022 December 31, 2021

Unamortized in-place lease liabilities $ 193,894 $ 210,261

3 unchanged sentences

Total $ 300,009 $ 321,419

The amortization of below-market lease intangibles is included as a component of “Rental income” in the accompanying consolidated statements of operations and comprehensive income and totaled $ 8.5 million and $ 1.4 million for the six months ended June 30, 2022 and 2021, respectively.

The amortization of below-market lease intangibles is included as a component of “Rental income” in the accompanying consolidated statements of operations and comprehensive income and totaled $ 13.3 million and $ 2.1 million for the nine months ended September 30, 2022 and 2021, respectively.

MORTGAGE AND OTHER INDEBTEDNESS

The following table summarizes the Company’s indebtedness as of June 30, 2022 and December 31, 2021:

($ in thousands) June 30, 2022 December 31, 2021

The following table summarizes the Company’s indebtedness as of September 30, 2022 and December 31, 2021:

($ in thousands) September 30, 2022 December 31, 2021

Mortgages payable $ 234,433 $ 392,590

6 unchanged sentences

Total mortgage and other indebtedness, net $ 3,012,870 $ 3,150,808

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of June 30, 2022, considering the impact of interest rate swaps, is summarized below:

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of September 30, 2022, considering the impact of interest rate swaps, is summarized below:

($ in thousands) Amount

9 unchanged sentences

(1) Fixed rate debt includes the portion of variable rate debt that has been hedged by interest rate swaps.

As of June 30, 2022, $ 720.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 2.7 years.

As of September 30, 2022, $ 820.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 2.9 years.

(2) Variable rate debt includes the portion of fixed rate debt that has been hedged by interest rate swaps.

As of June 30, 2022, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 3.2 years.

As of September 30, 2022, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 2.9 years.

Mortgages Payable

The following table summarizes the Company’s mortgages payable:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

($ in thousands) Balance Weighted Average

7 unchanged sentences

Total mortgages payable $ 234,433 $ 392,590

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of June 30, 2022 and December 31, 2021.

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of September 30, 2022 and December 31, 2021.

(2) On April 1, 2022, the interest rate on the variable rate mortgage switched to the Bloomberg Short Term Bank Yield Index (“BSBY”) plus 160 basis points from LIBOR plus 160 basis points.

The one-month BSBY rate was 1.61 % as of June 30, 2022.

The one-month BSBY rate was 3.09 % as of September 30, 2022.

The one-month LIBOR rate was 0.10 % as of December 31, 2021.

Mortgages payable are secured by certain real estate and, in some cases, by guarantees from the Operating Partnership, are generally due in monthly installments of principal and interest and mature over various terms through 2032.

During the six months ended June 30, 2022, we repaid mortgages payable totaling $ 78.7 million that had a weighted average fixed interest rate of 4.43 % and made scheduled principal payments of $ 2.1 million related to amortizing loans.

During the nine months ended September 30, 2022, we repaid mortgages payable totaling $ 155.2 million that had a weighted average fixed interest rate of 4.31 % and made scheduled principal payments of $ 3.0 million related to amortizing loans.

Unsecured Notes

The following table summarizes the Company’s senior unsecured notes and exchangeable senior notes:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

($ in thousands) Maturity Date Balance Interest Rate Balance Interest Rate

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The following table summarizes the Company’s term loans and revolving line of credit:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

($ in thousands) Maturity Date Balance Interest Rate Balance Interest Rate

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July 17, 2026 150,000 2.73 % 150,000 2.97 %

Unsecured term loan due 2029 – fixed rate (6)

July 29, 2029 300,000 4.05 % — — %

Total unsecured term loans $ 820,000 $ 720,000

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January 8, 2026 $ — 4.24 % $ 55,000 1.20 %

(1) Unsecured term loans and revolving line of credit assumed in connection with the Merger.

(2) $ 200,000 of LIBOR-based variable rate debt has been swapped to a fixed rate 2.85 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.85 % through November 22, 2023.

The applicable credit spread was 1.25 % as of June 30, 2022 and December 31, 2021.

(3) $ 120,000 of LIBOR-based variable rate debt has been swapped to a fixed rate 1.68 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.70 % through July 17, 2024.

The applicable credit spread was 1.20 % as of June 30, 2022 and December 31, 2021.

Subsequent to June 30, 2022, the Secured Overnight Financing Rate (“SOFR”) replaced LIBOR as the interest reference rate for this term loan.

(1) Unsecured term loans assumed in connection with the Merger.

(2) As of December 31, 2021, $ 200,000 of LIBOR-based variable rate debt had been swapped to a fixed rate 2.85 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.85 % through November 22, 2023.

The applicable credit spread was 1.25 % as of December 31, 2021.

(3) As of September 30, 2022, $ 120,000 of Secured Overnight Financing Rate (“SOFR”)-based variable rate debt has been swapped to a fixed rate of 1.58 % plus a credit spread based on a ratings grid ranging from 0.80 % to 1.65 % through July 17, 2024.

The applicable

credit spread was 1.10 % as of September 30, 2022.

As of December 31, 2021, $ 120,000 of LIBOR-based variable rate debt had been swapped to a fixed rate 1.68 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.70 % through July 17, 2024.

The applicable credit spread was 1.20 % as of December 31, 2021.

(4) $ 250,000 of LIBOR-based variable rate debt has been swapped to a fixed rate of 5.09 % through October 24, 2025.

The maturity date of the term loan may be extended for up to three additional periods of one year at the Operating Partnership’s option, subject to certain conditions.

(6) $ 150,000 of LIBOR-based variable rate debt has been swapped to a fixed rate 1.77 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.70 % through July 17, 2026.

The applicable credit spread was 1.20 % as of June 30, 2022 and December 31, 2021.

Subsequent to June 30, 2022, SOFR replaced LIBOR as the interest reference rate for this term loan.

(5) As of September 30, 2022, $ 150,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 1.68 % plus a credit spread based on a ratings grid ranging from 0.75 % to 1.60 % through July 17, 2026.

The applicable credit spread was 1.05 % as of September 30, 2022.

As of December 31, 2021, $ 150,000 of LIBOR-based variable rate debt had been swapped to a fixed rate 1.77 % plus a credit spread based on a leverage grid ranging from 1.20 % to 1.70 % through July 17, 2026.

The applicable credit spread was 1.20 % as of December 31, 2021.

(6) $ 300,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 2.70 % plus a credit spread based on a ratings grid ranging from 1.15 % to 2.20 % through November 22, 2023.

The applicable credit spread was 1.35 % as of September 30, 2022.

(7) The revolving line of credit has two six-month extension options that the Company can exercise, at its election, subject to (i) customary representations and warranties, including, but not limited to, the absence of an event of default as defined in the unsecured credit agreement and (ii) payment of an extension fee equal to 0.075 % of the revolving line of credit capacity.

On July 29, 2022, SOFR replaced LIBOR as the interest reference rate for the revolving line of credit.

Unsecured Revolving Credit Facility

On October 22, 2021, in connection with the Merger, the Operating Partnership (as successor by merger to RPAI), as borrower, and the Company entered into the First Amendment (the “First Amendment”) to the Credit Agreement (as defined below) with KeyBank National Association (“KeyBank”), as administrative agent, and the lenders party thereto.

The First Amendment amends the Sixth Amended and Restated Credit Agreement, dated as of July 8, 2021 (as amended, the “Credit Agreement”), among RPAI, as borrower, KeyBank, as administrative agent, and the lenders from time to time party thereto, which provides for an $ 850.0 million unsecured revolving credit facility (the “Revolving Facility”) with a scheduled maturity date of January 8, 2026 (which maturity date may be extended for up to two additional periods of six months at the Operating Partnership’s option, subject to certain conditions).

Under the Credit Agreement, the Operating Partnership has the option to increase the Revolving Facility to an aggregate committed amount of $ 1.6 billion upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Credit Agreement, to provide such increased amounts.

Borrowings under the Revolving Facility bear interest at a rate per annum equal to LIBOR or the alternate base rate plus a margin based on the Operating Partnership’s leverage ratio or credit rating, respectively, plus a facility fee based on the Operating Partnership’s leverage ratio or credit rating, respectively.

On July 29, 2022, the Operating Partnership, as borrower, and the Company entered into the Second Amendment (the “Second Amendment”) to the Sixth Amended and Restated Credit Agreement, dated as of July 8, 2021 (as amended, the “Credit Agreement”) with a syndicate of financial institutions to provide for (i) a $ 250.0 million increase to the $ 850.0 million unsecured revolving line of credit that was assumed in the Merger, resulting in a $ 1.1 billion unsecured revolving credit facility (the “2022 Revolving Facility”) and (ii) a seven-year $ 300.0 million unsecured term loan (the “$ 300 M Term Loan”).

Under the Second Amendment, the Operating Partnership has the option, subject to certain customary conditions, to increase the 2022 Revolving Facility and/or incur additional term loans in an aggregate amount for all such increases and additional loans of up to $ 600.0 million, for a total facility amount of up to $ 2.0 billion.

The 2022 Revolving Facility has a scheduled maturity date of January 8, 2026, which maturity date may be extended for up to two additional periods of six months at the Operating Partnership’s option, subject to certain conditions.

Borrowings under the 2022 Revolving Facility bear interest at a rate per annum equal to SOFR plus a margin based on the Operating Partnership’s leverage ratio or credit rating, respectively, plus a facility fee based on the Operating Partnership’s leverage ratio or credit rating, respectively.

The SOFR rate is also subject to an additional 0.10 % spread adjustment as specified in the Second Amendment.

The 2022 Revolving Facility is currently priced on the leverage-based pricing grid.

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The Company may irrevocably elect to convert to the ratings-based pricing grid at any time.

As of June 30, 2022, making such an election would have resulted in a lower interest rate;

As of September 30, 2022, making such an election would have resulted in a lower interest rate;

however, the Company had not made the election to convert to the ratings-based pricing grid.

The Credit Agreement includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

Subsequent to June 30, 2022, SOFR replaced LIBOR as the interest reference rate for the Revolving Facility.

The following table summarizes the key terms of the Revolving Facility as of June 30, 2022:

The following table summarizes the key terms of the 2022 Revolving Facility as of September 30, 2022:

($ in thousands) Leverage-Based Pricing Investment Grade Pricing

Credit Agreement Maturity Date Extension Option Extension Fee Credit Spread Facility Fee Credit Spread Facility Fee

2022 Credit Agreement Maturity Date Extension Option Extension Fee Credit Spread Facility Fee Credit Spread Facility Fee SOFR Adjustment

$ 1,100,000 unsecured revolving line of credit

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and (v) a minimum unencumbered interest coverage ratio.

As of June 30, 2022, we were in compliance with all such covenants.

As of June 30, 2022, we had letters of credit outstanding which totaled $ 1.5 million, against which no amounts were advanced as of June 30, 2022.

Subsequent to June 30, 2022, the Operating Partnership entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement with a syndicate of financial institutions to provide for (i) a $ 250.0 million increase to the Revolving Facility, resulting in a $ 1.1 billion unsecured revolving credit facility (the “2022 Revolving Facility”) and (ii) a seven-year $ 300.0 million unsecured term loan (the “$ 300 M Term Loan”).

Borrowings under the 2022 Revolving Facility will bear interest at a rate per annum equal to SOFR plus a margin based on the Operating Partnership’s leverage ratio or credit rating, respectively.

There were no changes to the credit spreads in the Second Amendment;

however, the SOFR rate will also be subject to an additional 0.10 % spread adjustment as specified in the Second Amendment.

The $ 300 M Term Loan will be priced on a ratings-based pricing grid at a rate of SOFR plus a credit spread ranging from 1.15 % to 2.20 %.

The SOFR rate will also be subject to an additional 0.10 % spread adjustment as specified in the Second Amendment.

Proceeds from the $ 300 M Term Loan were used to repay the Operating Partnership’s existing $ 200.0 million unsecured term loan that was scheduled to mature on November 22, 2023 (the “$ 200 M Term Loan”) and for general corporate purposes.

In conjunction with these transactions, we (i) designated the interest rate swaps related to the $ 200 M Term Loan to the $ 300 M Term Loan and the interest reference rate will be replaced with term SOFR effective with the next reset date in August 2022 through November 22, 2023;

(ii) entered into two forward-starting interest rate swap contracts with notional amounts totaling $ 200.0 million that swap a floating rate of term SOFR to a fixed rate of 2.37 % plus a spread of 1.35 % with an effective date of November 22, 2023 through August 1, 2025;

and (iii) entered into two agreements to swap a total of $ 100.0 million of SOFR-based variable rate debt to a fixed rate of 2.66 % plus a spread of 1.35 % with an effective date of August 1, 2022 through August, 1, 2025.

The Operating Partnership is permitted to prepay the $ 300 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before July 29, 2024.

As of September 30, 2022, we were in compliance with all such covenants.

As of September 30, 2022, we had letters of credit outstanding which totaled $ 1.5 million, against which no amounts were advanced as of September 30, 2022.

Unsecured Term Loans

On October 22, 2021, in connection with the Merger, the Operating Partnership (as successor by merger to RPAI) assumed all of RPAI’s outstanding $ 470.0 million aggregate principal of unsecured term loans (“Unsecured Term Loans”).

The Unsecured Term Loans are currently priced on a leverage-based pricing grid.

In accordance with the respective term loan agreements, the credit spread set forth in the leverage grid resets quarterly based on the Company’s leverage, as calculated at the previous quarter end.

The Company may irrevocably elect to convert to a ratings-based pricing grid at any time.

As of June 30, 2022, the Company had not made the election to convert to a ratings-based pricing grid.

Subsequent to June 30, 2022, the Company made the election to convert to the ratings-based pricing grid with respect to the $ 120.0 million and $ 150.0 million term loans.

The following table summarizes the key terms of the Unsecured Term Loans assumed as of June 30, 2022:

On July 29, 2022, in conjunction with the Second Amendment, the Operating Partnership obtained a $ 300 M Term Loan that is priced on a ratings-based pricing grid at a rate of SOFR plus a credit spread ranging from 1.15 % to 2.20 %.

The SOFR rate is also subject to an additional 0.10 % spread adjustment as specified in the Second Amendment.

Proceeds from the $ 300 M Term Loan were used to repay the Operating Partnership’s $ 200.0 million unsecured term loan that was assumed in the Merger and was scheduled to mature on November 22, 2023 (the “$ 200 M Term Loan”), certain secured loans, and for other general corporate purposes.

The Operating Partnership is permitted to prepay the $ 300 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before July 29, 2024.

The agreement related to the $ 300 M Term Loan includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

On October 22, 2021, in connection with the Merger, the Operating Partnership (as successor by merger to RPAI) assumed RPAI’s $ 120.0 million (the “$ 120 M Term Loan”) and $ 150.0 million (the “$ 150 M Term Loan”) unsecured term loans, which were originally priced on a leverage-based pricing grid with the credit spread set forth in the leverage grid resetting quarterly based on the Company’s leverage, as calculated at the previous quarter end.

The Company had the option to irrevocably elect to convert to a ratings-based pricing grid at any time.

On August 2, 2022, the Company made the election to convert to the ratings-based pricing grid.

The agreement related to the $ 150 M Term Loan includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

Under the agreement related to the $ 120 M Term Loan and the $ 150 M Term Loan, the Operating Partnership has the option to increase each of the term loans to $ 250.0 million upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The Operating Partnership is permitted to prepay each of the $ 120 M Term Loan and $ 150 M Term Loan, in whole or in part, at any time without being subject to a prepayment fee.

On October 25, 2018, the Operating Partnership entered into a term loan agreement with KeyBank National Association, as Administrative Agent, and the other lenders party thereto, providing for an unsecured term loan facility of up to $ 250.0 million (the “$ 250 M Term Loan”).

The Operating Partnership has the option to increase the $ 250 M Term Loan to $ 300.0 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The Operating Partnership is permitted to prepay the $ 250 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

The unsecured term loan agreements contain representations, financial and other affirmative and negative covenants and events of default that are substantially similar to those contained in the Credit Agreement.

The unsecured term loan agreements all rank pari passu with the Operating Partnership’s 2022 Revolving Facility and other unsecured indebtedness of the Operating Partnership.

The following table summarizes the key terms of the unsecured term loans as of September 30, 2022:

($ in thousands)

Unsecured Term Loans Assumed

Unsecured Term Loans

Maturity Date Leverage-Based Pricing

Credit Spread Investment Grade Pricing

Credit Spread

Credit Spread SOFR Adjustment

$ 120,000 unsecured term loan due 2024

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2.00 % – 2.55 %

2.00 % – 2.50 %

$ 150,000 unsecured term loan due 2026

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0.75 % – 1.60 %

Under the agreement related to the $ 120.0 million and $ 150.0 million term loans, the Operating Partnership has the option to increase each of the term loans to $ 250.0 million upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

In addition, under the agreement related to the $ 200.0 million term loan, the Operating Partnership has the option to increase the term loan to $ 300.0 million upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the term loan agreement, to provide such increased amounts.

The agreements related to the Unsecured Term Loans assumed in the Merger contain representations, financial and other affirmative and negative covenants and events of default that are substantially similar to those contained in the Credit Agreement.

The agreement related to the $ 150.0 million term loan includes a sustainability metric based on targeted greenhouse gas emission reductions, which results in a reduction of the otherwise applicable interest rate margin by one basis point upon achievement of targets set forth therein.

On October 25, 2018, the Operating Partnership entered into a Term Loan Agreement (the “Agreement”) with KeyBank National Association, as Administrative Agent, and the other lenders party thereto, providing for an unsecured term loan facility of up to $ 250.0 million (the “$ 250 M Term Loan”).

The $ 250 M Term Loan ranks pari passu with the Operating Partnership’s existing Revolving Facility and other unsecured indebtedness of the Operating Partnership.

The $ 250 M Term Loan has a scheduled maturity date of October 24, 2025, which maturity date may be extended for up to three additional periods of one year at the Operating Partnership’s option, subject to certain conditions.

The Operating Partnership is permitted to prepay the $ 250 M Term Loan in whole or in part, at any time, subject to a prepayment fee if prepaid on or before October 25, 2023.

$ 300,000 unsecured term loan due 2029

7/29/2029 N/A 1.15 % – 2.20 %

(1) The maturity date may be extended for up to three additional periods of one year each at the Operating Partnership’s option, subject to certain conditions.

Debt Issuance Costs

Debt issuance costs are amortized on a straight-line basis over the terms of the respective loan agreements.

Debt issuance costs are amortized over the terms of the respective loan agreements.

The following amounts of amortization of debt issuance costs are included as a component of “Interest expense” in the accompanying consolidated statements of operations and comprehensive income:

Six Months Ended June 30,

Nine Months Ended September 30,

($ in thousands) 2022 2021

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Fair Value of Fixed and Variable Rate Debt

As of June 30, 2022, the estimated fair value of fixed rate debt was $ 2.1 billion compared to the book value of $ 2.2 billion.

As of September 30, 2022, the estimated fair value of fixed rate debt was $ 1.9 billion compared to the book value of $ 2.1 billion.

The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 6.67 % to 7.06 %.

As of June 30, 2022, the estimated fair value of variable rate debt was $ 749.8 million compared to the book value of $ 748.8 million.

As of September 30, 2022, the estimated fair value of variable rate debt was $ 850.5 million compared to the book value of $ 848.5 million.

The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 4.09 % to 5.14 %.

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The agreements with each of our derivative counterparties provide that in the event of default on any of our indebtedness, we could also be declared in default on our derivative obligations.

As of June 30, 2022, we were party to 12 cash flow derivative agreements with notional amounts totaling $ 720.0 million, which includes $ 470.0 million of interest rate swaps assumed in connection with the Merger.

These derivative agreements effectively fix the interest rate underlying certain variable rate debt instruments over expiration dates through 2026.

Using a weighted average interest rate spread over LIBOR on all variable rate debt resulted in fixing the weighted average interest rate at 3.72 %.

As of June 30, 2022, we were also party to two fair value derivative agreements with notional amounts totaling $ 155.0 million that swap a blended fixed rate of 4.52 % for a blended floating rate of LIBOR plus 3.70 % with an expiration date of September 10, 2025.

In December 2021, we entered into two forward-starting interest rate swap contracts with notional amounts totaling $ 150.0 million that swap a floating rate of compound SOFR for a fixed rate of 1.356 % with an effective date of October 1, 2022 and an expiration date of June 1, 2032.

As of June 30, 2022, the estimated fair value of the forward-starting swaps represented an asset of $ 18.6 million and is reflected within “Prepaid and other assets” in the accompanying consolidated balance sheets.

As of June 30, 2022, the estimated fair value of our interest rate derivatives represented an asset of $ 10.3 million and a liability of $ 12.6 million, including accrued interest of $ 0.8 million.

The derivative assets are reflected within “Prepaid and other assets” and the derivative liabilities are reflected within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.

As of December 31, 2021, the estimated fair value of our interest rate derivatives represented a liability of $ 35.7 million, including accrued interest of $ 1.0 million, which is reflected within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.

During the three months ended September 30, 2022, we amended certain interest rate swap agreements, contemporaneous with a modification of the Company’s unsecured revolving credit facility and $ 300 M Term Loan, $ 120 M Term Loan and $ 150 M Term Loan, to facilitate reference rate reform, converting the outstanding swaps from LIBOR to SOFR.

In addition, we (i) designated the interest rate swaps related to the $ 200 M Term Loan that was repaid in July 2022 to the $ 300 M Term Loan with an effective date of August 2022 and a maturity date of November 2023;

(ii) entered into two forward-starting interest rate swap contracts with notional amounts totaling $ 200.0 million that swap a floating rate of term SOFR to a fixed rate of 2.37 % plus a credit spread of 1.35 % with an effective date of November 2023 and a maturity date of August 2025;

and (iii) entered into two agreements to swap a total of $ 100.0 million of SOFR-based variable rate debt to a fixed rate of 2.66 % plus a credit spread of 1.35 % with an effective date of August 2022 and a maturity date of August 2025.

The following table summarizes the terms and fair values of the Company’s derivative financial instruments that were designated and qualified as part of a hedging relationship as of September 30, 2022 and December 31, 2021:

($ in thousands) Fair Value Assets (Liabilities) (1)

Type of Hedge Number of Instruments Aggregate Notional Reference Rate Interest Rate Effective Date Maturity Date September 30, 2022 December 31, 2021

Cash Flow Four $ 250,000 LIBOR 3.09 % 12/3/2018 10/24/2025 $ 7,243 $ ( 18,282 )

Cash Flow Two 100,000 SOFR 2.66 % 8/1/2022 8/1/2025 3,645 —

Cash Flow Two 200,000 SOFR 2.72 % 8/3/2022 11/22/2023 3,295 ( 7,769 )

Cash Flow Three 120,000 SOFR 1.58 % 8/15/2022 7/17/2024 5,414 ( 2,190 )

Cash Flow Three 150,000 SOFR 1.68 % 8/15/2022 7/17/2026 11,684 ( 3,876 )

$ 820,000 $ 31,281 $ ( 32,117 )

Fair Value (2)

Two $ 155,000 LIBOR LIBOR + 3.70 %

4/23/2021 9/10/2025 $ ( 14,979 ) $ ( 2,630 )

Forward-Starting

Cash Flow (3)

Two $ 150,000 SOFR 1.356 % 12/1/2022 6/1/2032 $ 26,732 $ 299

Forward-Starting

Two $ 200,000 SOFR 2.37 % 11/22/2023 8/1/2025 $ 4,761 $ —

(1) Derivatives in an asset position are included within “Prepaid and other assets” and derivatives in a liability position are included within “Accounts payable and accrued expenses” in the accompanying consolidated balance sheets.

(2) The derivative agreements swap a blended fixed rate of 4.52 % for a blended floating rate of LIBOR plus 3.70 %.

(3) Subsequent to September 30, 2022, we terminated these two forward-starting interest rate swaps with notional amounts totaling $ 150.0 million and received proceeds of $ 30.9 million upon termination.

This settlement is included as a component of accumulated other comprehensive income and will be reclassified to earnings over time as the hedged items are recognized in earnings.

These interest rate derivative agreements are the only assets or liabilities that we record at fair value on a recurring basis.

The valuation of these assets and liabilities is determined using widely accepted techniques including discounted cash flow analysis.

These techniques consider the contractual terms of the derivatives (including the period to maturity) and use observable market-based inputs such as interest rate curves and implied volatilities.

We also incorporate credit valuation adjustments into the fair value measurements to reflect nonperformance risk on both our part and that of the respective counterparties.

We determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.

As of September 30, 2022 and December 31, 2021, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined the credit valuation adjustments were not significant to the overall valuation of our derivatives.

As a result, we determined our derivative valuations were classified within Level 2 of the fair value hierarchy.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings.

Approximately $ 3.3 million and $ 1.1 million was reclassified as a reduction to earnings during the three months ended June 30, 2022 and 2021, respectively.

Approximately $ 7.4 million and $ 2.4 million was reclassified as a reduction to earnings during the six months ended June 30, 2022 and 2021, respectively.

Approximately $ 1.2 million and $ 1.7 million was reclassified as a reduction to earnings during the three months ended September 30, 2022 and 2021, respectively.

Approximately $ 8.6 million and $ 4.1 million was reclassified as a reduction to earnings during the nine months ended September 30, 2022 and 2021, respectively.

As interest payments on our derivatives are made over the next 12 months, we estimate the decrease to interest expense to be $ 13.1 million, assuming the current LIBOR and SOFR curves.

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Distributions

Our Board of Trustees declared a cash distribution of $ 0.21 per common share and Common Unit for the second quarter of 2022.

This distribution was paid on July 15, 2022 to common shareholders and Common Unit holders of record as of July 8, 2022.

Our Board of Trustees declared a cash distribution of $ 0.22 per common share and Common Unit for the third quarter of 2022.

This distribution was paid on October 14, 2022 to common shareholders and Common Unit holders of record as of October 7, 2022.

At-The-Market Offering Program

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On November 30, 2021, the Company and the Operating Partnership amended the Equity Distribution Agreement to reflect their filing of a shelf registration statement on November 16, 2021 with the SEC.

As of June 30, 2022, the Company has no t sold any common shares under the ATM Program.

As of September 30, 2022, the Company has no t sold any common shares under the ATM Program.

The Operating Partnership intends to use the net proceeds, if any, to repay borrowings under its 2022 Revolving Facility and other indebtedness and for working capital and other general corporate purposes.

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In April 2022, the Company’s Board of Trustees authorized a $ 150.0 million increase to the size of the Share Repurchase Program, authorizing share repurchases up to an aggregate of $ 300.0 million.

As of June 30, 2022, the Company has no t repurchased any shares under its Share Repurchase Program.

The Company intends to fund any future repurchases under the Share Repurchase Program with cash on hand or availability under the Revolving Facility, subject to any applicable restrictions.

As of September 30, 2022, the Company has no t repurchased any shares under its Share Repurchase Program.

The Company intends to fund any future repurchases under the Share Repurchase Program with cash on hand or availability under the 2022 Revolving Facility, subject

to any applicable restrictions.

The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will depend upon prevailing market conditions, regulatory requirements and other factors.

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Limited Partner Units have been omitted from the Parent Company’s denominator for the purpose of computing diluted earnings per share since the effect of including these amounts in the denominator would have no dilutive impact.

Weighted average Limited Partner Units outstanding were 2.8 million and 2.6 million for the three and six months ended June 30, 2022, respectively, and 2.5 million for the three and six months ended June 30, 2021.

Due to the net loss allocable to common shareholders and Common Unit holders for the three months ended June 30, 2021 and the six months ended June 30, 2022, no securities had a dilutive impact for those periods.

Weighted average Limited Partner Units outstanding were 3.0 million and 2.7 million for the three and nine months ended September 30, 2022, respectively, and 2.4 million and 2.5 million for the three and nine months ended September 30, 2021, respectively.

Due to the net loss allocable to common shareholders and Common Unit holders for the three and nine months ended September 30, 2022 and the three months ended September 30, 2021, no securities had a dilutive impact for those periods.

COMMITMENTS AND CONTINGENCIES

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We are obligated under various completion guarantees with certain lenders and lease agreements with tenants to complete all or portions of a development project and tenant-specific space currently under construction.

We believe we currently have sufficient financing in place to fund these projects and expect to do so primarily through borrowings on the Revolving Facility.

We believe we currently have sufficient financing in place to fund these projects and expect to do so primarily through free cash flow or borrowings on the 2022 Revolving Facility.

In 2017, we provided a repayment guaranty on a $ 33.8 million construction loan associated with the development of the Embassy Suites at the University of Notre Dame, consistent with our 35 % ownership interest.

Our portion of the repayment guaranty is limited to $ 5.9 million and the guaranty’s term is through July 1, 2024, the maturity date of the construction loan.

As of June 30, 2022, the outstanding loan balance is $ 33.6 million, of which our share is $ 11.8 million.

As of September 30, 2022, the outstanding loan balance was $ 33.6 million, of which our share was $ 11.8 million.

The loan is secured by the hotel.

As of June 30, 2022, we had outstanding letters of credit totaling $ 1.5 million with no amounts advanced against these instruments.

As of September 30, 2022, we had outstanding letters of credit totaling $ 1.5 million with no amounts advanced against these instruments.

Legal Proceedings

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SUBSEQUENT EVENTS

Subsequent to June 30, 2022, we:

• entered into the Second Amendment to the Credit Agreement with a syndicate of financial institutions to provide for a $ 250.0 million increase to the Revolving Facility, resulting in a $ 1.1 billion unsecured revolving credit facility.

In addition, the Operating Partnership issued a seven-year $ 300 M Term Loan and used the proceeds to repay the $ 200 M Term Loan that was scheduled to mature in 2023 and for general corporate purposes.

(ii) entered into two forward-starting interest rate swap contracts with notional amounts totaling $ 200.0 million that swap a floating rate of term SOFR to a fixed rate with an effective date of November 22, 2023 through August 1, 2025;

and (iii) entered into two agreements to swap a total of $ 100.0 million of SOFR-based variable rate debt to a fixed rate with an effective date of August 1, 2022 through August 1, 2025.

See Note 7 to the consolidated financial statements for further details;

• closed on the acquisition of Palms Plaza, a 68,976 square foot multi-tenant retail property located in the Miami MSA, for a gross purchase price of $ 35.8 million;

• repaid two mortgages payable with principal balances totaling $ 44.9 million and a weighted average fixed interest rate of 4.20 %.

Subsequent to September 30, 2022, we:

• redeemed all remaining Class B units related to a joint venture that owned Crossing at Killingly Commons that was entered into by Inland Diversified prior to its merger with the Company for $ 9.7 million;

• sold one ground lease at Lincoln Plaza, our multi-tenant retail property in Worcester, Massachusetts, for a sales price of $ 10.0 million;

• terminated two forward-starting interest rate swaps with notional amounts totaling $ 150.0 million and received proceeds of $ 30.9 million upon termination.

This settlement is included as a component of accumulated other comprehensive income and will be reclassified to earnings over time as the hedged items are recognized in earnings.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements