What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-07 · 212 added, 126 removed, 661 unchanged (34% of the section changed)

3 unchanged sentences

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

September 30,

2023 December 31,

10 unchanged sentences

Investments in unconsolidated subsidiaries 10,197 10,414

Assets associated with investment property held for sale 14,309 —

Total assets $ 7,052,497 $ 7,341,982

3 unchanged sentences

Deferred revenue and other liabilities 279,960 298,039

Liabilities associated with investment property held for sale 586 —

Total liabilities 3,347,828 3,516,130

3 unchanged sentences

219,387,345 and 219,185,658 shares issued and outstanding at

June 30, 2023 and December 31, 2022, respectively

September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 4,891,105 4,897,736

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,

2023 2022 2023 2022

8 unchanged sentences

Depreciation and amortization 105,930 115,831 323,463 357,096

Impairment charges 477 — 477 —

Total expenses 174,421 182,008 528,263 558,082

Gain on sales of operating properties, net 28,440 23,958 28,440 27,126

(Loss) gain on sales of operating properties, net ( 5,972 ) — 22,468 27,126

Operating income 26,826 18,303 116,933 66,351

2 unchanged sentences

Income tax (expense) benefit of taxable REIT subsidiary ( 68 ) — ( 84 ) 259

Equity in earnings (loss) of unconsolidated subsidiaries 118 114 ( 126 ) ( 200 )

Equity in (loss) earnings of unconsolidated subsidiaries ( 47 ) 144 ( 173 ) ( 56 )

Other income (expense), net 950 58 1,657 ( 207 )

7 unchanged sentences

Change in fair value of derivatives ( 3,040 ) 33,131 ( 6,043 ) 89,628

Total comprehensive income 41,123 31,004 35,039 53,116

Total comprehensive (loss) income ( 863 ) 25,410 34,176 78,526

Comprehensive income attributable to noncontrolling

( 195 ) ( 511 ) ( 806 ) ( 1,441 )

Comprehensive income attributable to the Company $ 40,594 $ 30,277 $ 34,428 $ 52,186

Comprehensive (loss) income attributable to the Company $ ( 1,058 ) $ 24,899 $ 33,370 $ 77,085

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

21 unchanged sentences

Balance at June 30, 2023 219,374,275 $ 2,194 $ 4,894,907 $ 71,323 $ ( 1,275,617 ) $ 3,692,807

Stock compensation activity ( 91 ) — 2,968 — — 2,968

Other comprehensive loss — — — ( 3,128 ) — ( 3,128 )

Distributions to common shareholders — — — — ( 52,653 ) ( 52,653 )

Net income attributable to common shareholders — — — — 2,070 2,070

Exchange of redeemable noncontrolling interests for common shares 13,161 — 301 — — 301

Adjustment to redeemable noncontrolling interests — — ( 7,071 ) — — ( 7,071 )

Balance at September 30, 2023 219,387,345 $ 2,194 $ 4,891,105 $ 68,195 $ ( 1,326,200 ) $ 3,635,294

Balance at December 31, 2021 218,949,569 $ 2,189 $ 4,898,673 $ ( 15,902 ) $ ( 962,913 ) $ 3,922,047

11 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 to common shareholders — — — — ( 46,014 ) ( 46,014 )

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

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

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

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:

3 unchanged sentences

Gain on sales of operating properties, net ( 22,468 ) ( 27,126 )

Impairment charges 477 —

Straight-line rent ( 9,723 ) ( 12,653 )

16 unchanged sentences

Distribution from unconsolidated joint venture — 1,144

Net cash provided by investing activities 8,013 68,646

Capital contribution to unconsolidated joint venture — ( 125 )

Net cash used in investing activities ( 55,483 ) ( 13,694 )

Cash flows from financing activities:

6 unchanged sentences

Distributions paid – redeemable noncontrolling interests ( 2,127 ) ( 1,972 )

Distributions to noncontrolling interests ( 3,196 ) —

Net cash used in financing activities ( 299,350 ) ( 252,591 )

2 unchanged sentences

Cash, cash equivalents and restricted cash, end of period $ 58,314 $ 96,507

Non-cash investing and financing activities

Exchange of redeemable noncontrolling interests for common shares $ 301 $ —

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

3 unchanged sentences

(in thousands, except unit data)

September 30,

2023 December 31,

10 unchanged sentences

Investments in unconsolidated subsidiaries 10,197 10,414

Assets associated with investment property held for sale 14,309 —

Total assets $ 7,052,497 $ 7,341,982

3 unchanged sentences

Deferred revenue and other liabilities 279,960 298,039

Liabilities associated with investment property held for sale 586 —

Total liabilities 3,347,828 3,516,130

3 unchanged sentences

Common equity, 219,387,345 and 219,185,658 units issued and outstanding

at June 30, 2023 and December 31, 2022, respectively

at September 30, 2023 and December 31, 2022, respectively

3,567,099 3,692,171

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,

2023 2022 2023 2022

8 unchanged sentences

Depreciation and amortization 105,930 115,831 323,463 357,096

Impairment charges 477 — 477 —

Total expenses 174,421 182,008 528,263 558,082

Gain on sales of operating properties, net 28,440 23,958 28,440 27,126

(Loss) gain on sales of operating properties, net ( 5,972 ) — 22,468 27,126

Operating income 26,826 18,303 116,933 66,351

2 unchanged sentences

Income tax (expense) benefit of taxable REIT subsidiary ( 68 ) — ( 84 ) 259

Equity in earnings (loss) of unconsolidated subsidiaries 118 114 ( 126 ) ( 200 )

Equity in (loss) earnings of unconsolidated subsidiaries ( 47 ) 144 ( 173 ) ( 56 )

Other income (expense), net 950 58 1,657 ( 207 )

11 unchanged sentences

Change in fair value of derivatives ( 3,040 ) 33,131 ( 6,043 ) 89,628

Total comprehensive income 41,123 31,004 35,039 53,116

Total comprehensive (loss) income ( 863 ) 25,410 34,176 78,526

Comprehensive income attributable to noncontrolling

( 67 ) ( 209 ) ( 201 ) ( 535 )

Comprehensive income attributable to common

Comprehensive (loss) income attributable to common

$ ( 930 ) $ 25,201 $ 33,975 $ 77,991

21 unchanged sentences

Balance at June 30, 2023 $ 3,621,484 $ 71,323 $ 3,692,807

Stock compensation activity 2,968 — 2,968

Other comprehensive loss attributable to Parent Company — ( 3,128 ) ( 3,128 )

Distributions to Parent Company ( 52,653 ) — ( 52,653 )

Net income attributable to Parent Company 2,070 — 2,070

Conversion of Limited Partner Units to shares of the Parent Company 301 — 301

Adjustment to redeemable noncontrolling interests ( 7,071 ) — ( 7,071 )

Balance at September 30, 2023 $ 3,567,099 $ 68,195 $ 3,635,294

Balance at December 31, 2021 $ 3,937,949 $ ( 15,902 ) $ 3,922,047

11 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 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

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:

3 unchanged sentences

Gain on sales of operating properties, net ( 22,468 ) ( 27,126 )

Impairment charges 477 —

Straight-line rent ( 9,723 ) ( 12,653 )

16 unchanged sentences

Distribution from unconsolidated joint venture — 1,144

Net cash provided by investing activities 8,013 68,646

Capital contribution to unconsolidated joint venture — ( 125 )

Net cash used in investing activities ( 55,483 ) ( 13,694 )

Cash flows from financing activities:

6 unchanged sentences

Distributions paid – redeemable noncontrolling interests ( 2,127 ) ( 1,972 )

Distributions to noncontrolling interests ( 3,196 ) —

Net cash used in financing activities ( 299,350 ) ( 252,591 )

2 unchanged sentences

Cash, cash equivalents and restricted cash, end of period $ 58,314 $ 96,507

Non-cash investing and financing activities

Conversion of Limited Partner Units to shares of the Parent Company $ 301 $ —

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

2 unchanged sentences

Notes to Consolidated Financial Statements

June 30, 2023

September 30, 2023

($ 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, 2023 owned approximately 98.6 % 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, 2023 owned approximately 98.5 % of the common partnership interests in the Operating Partnership (“General Partner Units”).

The remaining 1.5 % 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 consolidated financial statements as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 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 consolidated financial statements as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 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 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, 2022.

2 unchanged sentences

The results of operations for the interim periods are not necessarily indicative of the results that may be expected on an annual basis.

As of June 30, 2023, the Company’s portfolio consisted of the following:

As of September 30, 2023, the Company’s portfolio consisted of the following:

Properties Square Footage

5 unchanged sentences

The Corner (IN) 1 24,000

Hamilton Crossing Centre 1 92,283

Edwards Multiplex – Ontario 1 124,614

(1) Included within operating retail properties are 10 properties that contain an office component.

Excludes one operating retail property classified as held for sale as of September 30, 2023.

Of the 180 operating retail properties, 177 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, 2023 and December 31, 2022 (in thousands) :

The following table summarizes the composition of the Company’s investment properties as of September 30, 2023 and December 31, 2022 (in thousands) :

Balance as of

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Land, buildings and improvements $ 7,643,839 $ 7,656,765

2 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, 2023 and 2022 (in thousands) :

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, 2023 and 2022 (in thousands) :

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

Straight-line rent adjustments 3,132 4,328 9,900 12,951

Straight-line rent recovery (reserve) for uncollectibility 504 ( 202 ) 190 ( 264 )

Straight-line rent reserve for uncollectibility ( 367 ) ( 34 ) ( 177 ) ( 298 )

Amortization of in-place lease liabilities, net 3,853 1,228 9,228 3,143

5 unchanged sentences

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 June 30, 2023, we owned investments in two 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, 2023, these consolidated VIEs had mortgage debt of $ 123.0 million, which were secured by assets of the VIEs totaling $ 227.2 million.

As of September 30, 2023, we owned investments in two 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, 2023,

these consolidated VIEs had mortgage debt of $ 112.7 million, which were secured by assets of the VIEs totaling $ 217.6 million.

The Operating Partnership guarantees the mortgage debt of these VIEs.

3 unchanged sentences

Parent Company

The Parent Company, which is considered a corporation for U.S.

federal income tax purposes, has been organized and operated, and intends to continue to operate, in a manner that will enable it to maintain its qualification as a REIT for U.S.

The Parent Company has been organized and operated, and intends to continue to operate, in a manner that will enable it to maintain its qualification as a REIT for U.S.

federal income tax purposes.

2 unchanged sentences

To the extent that it satisfies this distribution requirement, but distributes less than 100% of its taxable income, it will be subject to U.S.

federal corporate income tax on its undistributed REIT taxable income.

federal income tax on its undistributed REIT taxable income at regular corporate income tax rates.

REITs are subject to a number of organizational and operational requirements.

If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to U.S.

federal income tax on its taxable income at regular corporate rates for a period of four years following the year in which qualification is lost.

federal income tax on its taxable income at regular corporate income tax rates for a period of four years following the year in which qualification is lost.

Additionally, we may also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases.

15 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, 2023 and 2022 (in thousands) :

Six Months Ended June 30,

The following table summarizes the non-redeemable noncontrolling interests in consolidated properties for the nine months ended September 30, 2023 and 2022 (in thousands) :

Nine Months Ended September 30,

Noncontrolling interests balance as of January 1, $ 5,370 $ 5,146

Net income allocable to noncontrolling interests, excluding redeemable noncontrolling interests 201 139

Noncontrolling interests balance as of June 30,

Distributions to noncontrolling interests ( 3,196 ) —

Noncontrolling interests balance as of September 30,

$ 2,375 $ 5,285

2 unchanged sentences

The Company owns 90 % of the joint venture.

During the three months ended June 30, 2023, the Company originated a 10-year $ 95.1 million mortgage payable at a fixed interest rate of 5.36 % secured by the joint venture project.

During the nine months ended September 30, 2023, the Company originated a 10-year $ 95.1 million mortgage payable at a fixed interest rate of 5.36 % secured by the joint venture project.

In conjunction with the loan origination, the joint venture’s construction loan was repaid.

joint venture partner has the ability to put to the Company, subject to certain conditions, the joint venture partner’s interest in the joint venture at fair value.

The Company expects that these conditions will be met in the second half of 2023.

Under terms defined in the joint venture agreement, after construction completion and stabilization of the development project (as defined in the joint venture agreement), the Company has the ability to call, and the joint venture partner has the ability to put to the Company, subject to certain conditions, the joint venture partner’s interest in the joint venture at fair value.

As of September 30, 2023, these conditions for exercising the put and call options have been met but neither the Company nor the joint venture partner has exercised their respective options.

The joint venture is considered a VIE primarily because the Company’s joint venture partner does not have substantive kick-out rights or substantive participating rights.

5 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, 2023 and December 31, 2022, 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.

As of September 30, 2023 and December 31, 2022, 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.

We allocate net operating results of the Operating Partnership after noncontrolling interests in the consolidated properties based on the partners’ respective weighted average ownership interest.

1 unchanged sentence

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

For the three and six months ended June 30, 2023 and 2022, 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 June 30,

For the three and nine months ended September 30, 2023 and 2022, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

1 unchanged sentence

Limited partners’ weighted average interests in Operating Partnership 1.5 % 1.3 % 1.4 % 1.2 %

As of June 30, 2023, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.6 % and 1.4 %.

As of September 30, 2023, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.5 % and 1.5 %.

As of December 31, 2022, the Parent Company’s interest and the limited partners’ redeemable noncontrolling ownership interests in the Operating Partnership were 98.7 % and 1.3 %.

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 3,034,212 and 2,870,697 Limited Partner Units outstanding as of June 30, 2023 and December 31, 2022, respectively.

The increase in Limited Partner Units outstanding from December 31, 2022 is due to non-cash compensation awards granted to our executive officers in the form of Limited Partner Units.

There were 3,434,881 and 2,870,697 Limited Partner Units outstanding as of September 30, 2023 and December 31, 2022, respectively.

The increase in Limited Partner Units outstanding from December 31, 2022 is due to non-cash compensation

awards granted to our executive officers in the form of Limited Partner Units and the exercise of previously granted Appreciation Only Long-Term Incentive Plan (“AO LTIP”) Units in exchange for Limited Partner Units.

Redeemable Noncontrolling Interests – Subsidiaries

1 unchanged sentence

(“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.

As of June 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, were outstanding and accounted for as noncontrolling interests in the remaining venture.

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, were 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, 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.

1 unchanged sentence

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, 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, 2023 and 2022 were as follows (in thousands) :

Six Months Ended June 30,

As of September 30, 2022, 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, 2023 and 2022 were as follows (in thousands) :

Nine Months Ended September 30,

Redeemable noncontrolling interests balance as of January 1, $ 53,967 $ 55,173

3 unchanged sentences

Total limited partners’ interests in the Operating Partnership and other

redeemable noncontrolling interests balance as of June 30,

redeemable noncontrolling interests balance as of September 30,

$ 67,000 $ 56,954

2 unchanged sentences

Total limited partners’ interests in the Operating Partnership and other

redeemable noncontrolling interests balance as of June 30,

redeemable noncontrolling interests balance as of September 30,

$ 67,000 $ 56,954

10 unchanged sentences

Any recently issued accounting standards or pronouncements have been excluded as they are either not relevant to the Company or are not expected to have a material impact on the Company’s consolidated financial statements.

The Company did not acquire any properties during the six months ended June 30, 2023.

The Company closed on the following asset acquisitions during the six months ended June 30, 2022 (dollars in thousands) :

The Company closed on the following asset acquisition during the nine months ended September 30, 2023 (dollars in thousands) :

Date Property Name Metropolitan

1 unchanged sentence

Footage Acquisition

September 22, 2023 Prestonwood Place Dallas Multi-tenant retail 155,975 $ 81,000

The Company closed on the following asset acquisitions during the nine months ended September 30, 2022 (dollars in thousands) :

Date Property Name MSA Property Type Square

Footage Acquisition

February 16, 2022 Pebble Marketplace Las Vegas Multi-tenant retail 85,796 $ 44,100

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 closed on the following dispositions during the six months ended June 30, 2023 (dollars in thousands) :

DISPOSITIONS AND IMPAIRMENT CHARGES

The Company closed on the following dispositions during the nine months ended September 30, 2023 (dollars in thousands) :

Date Property Name MSA Property Type Square

Footage Sales Price Gain

Footage Sales Price Gain (Loss)

May 8, 2023 Kingwood Commons Houston Multi-tenant retail 158,172 $ 27,350 $ 4,736

June 8, 2023 Pan Am Plaza & Garage Indianapolis Land & garage — 52,025 23,635

September 11, 2023 Reisterstown Road Plaza Dallas Multi-tenant retail 376,683 48,250 ( 5,903 )

534,855 $ 127,625 $ 22,468

The Company closed on the following dispositions during the six months ended June 30, 2022 (dollars in thousands) :

The Company closed on the following dispositions during the nine months ended September 30, 2022 (dollars in thousands) :

Date Property Name MSA Property Type Square

7 unchanged sentences

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

There were no discontinued operations for the six months ended June 30, 2023 and 2022 as none of the dispositions represented a strategic shift that has had, or will have, a material effect on our operations or financial results.

As of September 30, 2023, the Company had entered into a contract to sell Eastside, a 43,640 square foot multi-tenant retail property located in the Dallas MSA.

This property qualified for held-for-sale accounting treatment upon meeting all applicable GAAP criteria during the quarter ended September 30, 2023, at which time depreciation and amortization ceased.

In addition, the assets and liabilities associated with this property are separately classified as held for sale in the accompanying consolidated balance sheet as of September 30, 2023.

No properties qualified for held-for-sale accounting treatment as of December 31, 2022.

As of September 30, 2023, in conjunction with classifying Eastside as held for sale, the Company recorded the asset at the lower of cost or fair value less estimated costs to sell, which was approximately $ 14.1 million.

The estimated fair value of Eastside was based upon the expected sales price from an executed sales contract and determined to be a Level 3 input within the fair value hierarchy.

As a result, we recorded a $ 0.5 million impairment charge during the three months ended September 30, 2023.

Eastside was sold on October 24, 2023 for a gross sales price of $ 14.4 million.

The following table presents the assets and liabilities associated with the investment property, Eastside, classified as held for sale as of September 30, 2023 (in thousands) :

September 30, 2023

Investment properties, at cost $ 15,016

accumulated depreciation ( 1,218 )

Net investment properties 13,798

Tenant and other receivables 100

Deferred costs, net 411

Assets associated with investment property held for sale $ 14,309

Accounts payable and accrued expenses $ 398

Deferred revenue and other liabilities 188

Liabilities associated with investment property held for sale $ 586

There were no discontinued operations for the nine months ended September 30, 2023 and 2022 as none of the dispositions represented a strategic shift that has had, or will have, a material effect on our operations or financial results.

DEFERRED COSTS AND INTANGIBLES, NET

1 unchanged sentence

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, 2023 and December 31, 2022, deferred costs consisted of the following (in thousands) :

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, deferred costs consisted of the following (in thousands) :

September 30, 2023 December 31, 2022

Acquired lease intangible assets $ 450,740 $ 522,152

2 unchanged sentences

accumulated amortization ( 197,434 ) ( 179,166 )

$ 325,060 $ 409,828

deferred costs associated with investment property held for sale ( 411 ) —

Total $ 324,649 $ 409,828

2 unchanged sentences

The amounts of such amortization included in the accompanying consolidated statements of operations and comprehensive income are as follows (in thousands) :

Six Months Ended June 30,

Nine Months Ended September 30,

Amortization of deferred leasing costs, lease intangibles and other $ 83,768 $ 117,177

4 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, 2023 and December 31, 2022, deferred revenue, intangibles, net and other liabilities consisted of the following (in thousands) :

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, deferred revenue, intangibles, net and other liabilities consisted of the following (in thousands) :

September 30, 2023 December 31, 2022

Unamortized in-place lease liabilities $ 167,390 $ 188,815

2 unchanged sentences

Lease liabilities 69,361 67,167

$ 280,148 $ 298,039

deferred revenue associated with investment property held for sale ( 188 ) —

Total $ 279,960 $ 298,039

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 $ 11.6 million and $ 8.5 million for the six months ended June 30, 2023 and 2022, 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 $ 18.5 million and $ 13.3 million for the nine months ended September 30, 2023 and 2022, respectively.

MORTGAGE AND OTHER INDEBTEDNESS

The following table summarizes the Company’s indebtedness as of June 30, 2023 and December 31, 2022 (in thousands) :

June 30, 2023 December 31, 2022

The following table summarizes the Company’s indebtedness as of September 30, 2023 and December 31, 2022 (in thousands) :

September 30, 2023 December 31, 2022

Mortgages payable $ 154,567 $ 233,621

6 unchanged sentences

Total mortgage and other indebtedness, net $ 2,868,828 $ 3,010,299

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of June 30, 2023, considering the impact of interest rate swaps, is summarized below (dollars in thousands) :

Consolidated indebtedness, including weighted average interest rates and weighted average maturities as of September 30, 2023, considering the impact of interest rate swaps, is summarized below (dollars in thousands) :

Outstanding Ratio Weighted Average

Interest Rate Weighted

Average Years to Maturity

Interest Rate Weighted Average Years

Fixed rate debt (1)

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

As of June 30, 2023, $ 820.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 2.2 years.

As of September 30, 2023, $ 820.0 million in variable rate debt is hedged to a fixed rate for a weighted average of 1.9 years.

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

As of June 30, 2023, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 2.2 years.

As of September 30, 2023, $ 155.0 million in fixed rate debt is hedged to a floating rate for a weighted average of 1.9 years.

Mortgages Payable

The following table summarizes the Company’s mortgages payable (dollars in thousands) :

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Balance Weighted Average

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Total mortgages payable $ 154,567 $ 233,621

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of June 30, 2023 and December 31, 2022.

(2) The interest rate on the variable rate mortgage is based on Bloomberg Short Term Bank Yield Index (“BSBY”) plus 160 basis points.

The one-month BSBY rate was 5.21 % and 4.36 % as of June 30, 2023 and December 31, 2022, respectively.

Subsequent to June 30, 2023, the Company amended the loan agreement to extend the maturity date to August 4, 2026, with a one-year extension option.

In addition, the interest rate margin increased to 215 basis points.

In conjunction with the extension, the Company made a $ 9.9 million paydown of the principal balance using available cash on hand.

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, 2023, we (i) originated a 10-year $ 95.1 million mortgage payable at a fixed interest rate of 5.36 % secured by the multifamily rental portion of the expansion project at One Loudoun Downtown – Pads G & H, (ii) repaid mortgages payable totaling $ 161.5 million that had a weighted average fixed interest rate of 3.85 %, and (iii) made scheduled principal payments of $ 1.7 million related to amortizing loans.

(1) The fixed rate mortgages had interest rates ranging from 3.75 % to 5.73 % as of September 30, 2023 and December 31, 2022.

(2) During the three months ended September 30, 2023, the interest rate on the variable rate mortgage increased to Bloomberg Short Term Bank Yield Index (“BSBY”) plus 215 basis points from BSBY plus 160 basis points in conjunction with the July 2023 amendment of the loan agreement.

The one-month BSBY rate was 5.39 % and 4.36 % as of September 30, 2023 and December 31, 2022, respectively.

Mortgages payable, which 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 2033.

During the nine months ended September 30, 2023, we (i) originated a 10-year $ 95.1 million mortgage payable at a fixed interest rate of 5.36 % secured by the multifamily rental portion of the expansion project at One Loudoun Downtown – Pads G & H, (ii) amended the loan agreement on the variable rate mortgage secured by Delray Marketplace to extend the maturity date to August 4, 2026, with a one-year extension option, and made a $ 9.9 million paydown of the principal balance using available cash on hand, (iii) repaid mortgages payable totaling $ 161.5 million that had a weighted average fixed interest rate of 3.85 %, and (iv) made scheduled principal payments of $ 2.7 million related to amortizing loans.

Unsecured Notes

The following table summarizes the Company’s senior unsecured notes and exchangeable senior notes (dollars in thousands) :

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Maturity Date Balance Interest Rate Balance Interest Rate

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March 15, 2025 350,000 4.00 % 350,000 4.00 %

Senior notes – LIBOR + 3.65 % due 2025 (1)

Senior notes – SOFR + 3.65 % due 2025 (1)

September 10, 2025 80,000 9.17 % 80,000 8.41 %

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April 1, 2027 175,000 0.75 % 175,000 0.75 %

Senior notes – LIBOR + 3.75 % due 2027 (2)

Senior notes – SOFR + 3.75 % due 2027 (2)

September 10, 2027 75,000 9.27 % 75,000 8.51 %

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Total senior unsecured notes $ 1,829,635 $ 1,924,635

(1) $ 80,000 of 4.47 % senior unsecured notes has been swapped to a variable rate of three-month LIBOR plus 3.65 % through September 10, 2025.

(2) $ 75,000 of 4.57 % senior unsecured notes has been swapped to a variable rate of three-month LIBOR plus 3.75 % through September 10, 2025.

(1) On July 1, 2023, the fallback rate in the derivative agreement went into effect.

As of September 30, 2023, $ 80,000 of 4.47 % senior unsecured notes has been swapped to a variable rate of three-month Secured Overnight Financing Rate (“SOFR”) plus 3.65 % through September 10, 2025.

As of December 31, 2022, $ 80,000 of 4.47 % senior unsecured notes had been swapped to a variable rate of three-month London Interbank Offered Rate (“LIBOR”) plus 3.65 %.

(2) On July 1, 2023, the fallback rate in the derivative agreement went into effect.

As of September 30, 2023, $ 75,000 of 4.57 % senior unsecured notes has been swapped to a variable rate of three-month SOFR plus 3.75 % through September 10, 2025.

As of December 31, 2022, $ 75,000 of 4.57 % senior unsecured notes had been swapped to a variable rate of three-month LIBOR plus 3.75 %.

During the three months ended September 30, 2023, the Company repaid the $ 95.0 million principal balance of the 4.23 % senior unsecured notes due 2023 using available cash on hand.

Unsecured Term Loans and Revolving Line of Credit

The following table summarizes the Company’s term loans and revolving line of credit (dollars in thousands) :

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Maturity Date Balance Interest Rate Balance Interest Rate

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January 8, 2026 $ 39,000 6.51 % $ — 5.56 %

(1) $ 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 June 30, 2023 and December 31, 2022.

(1) $ 120,000 of 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, 2023 and December 31, 2022.

(2) $ 250,000 of SOFR-based variable rate debt has been swapped to a fixed rate of 5.09 % through October 24, 2025.

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(3) $ 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 June 30, 2023 and December 31, 2022.

The applicable credit spread was 1.05 % as of September 30, 2023 and December 31, 2022.

(4) $ 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 June 30, 2023 and December 31, 2022.

The applicable credit spread was 1.35 % as of September 30, 2023 and December 31, 2022.

(5) 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.

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

As of June 30, 2023, making such an election would have resulted in a lower interest rate;

As of September 30, 2023, 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.

The following table summarizes the key terms of the Revolving Facility as of June 30, 2023 (dollars in thousands) :

The following table summarizes the key terms of the Revolving Facility as of September 30, 2023 (dollars in thousands) :

Leverage-Based Pricing Investment Grade Pricing

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and (v) a minimum unencumbered interest coverage ratio.

As of June 30, 2023, we were in compliance with all such covenants.

As of June 30, 2023, we had letters of credit outstanding totaling $ 0.3 million, against which no amounts were advanced as of June 30, 2023.

As of September 30, 2023, we were in compliance with all such covenants.

As of September 30, 2023, we had letters of credit outstanding totaling $ 0.3 million, against which no amounts were advanced as of September 30, 2023.

Unsecured Term Loans

As of June 30, 2023, the Operating Partnership has the following unsecured term loans:

As of September 30, 2023, the Operating Partnership has the following unsecured term loans:

(i) a $ 120.0 million unsecured term loan due July 2024 (the “$ 120 M Term Loan”), (ii) a $ 250.0 million unsecured term loan due October 2025 (the “$ 250 M Term Loan”), (iii) a $ 150.0 million unsecured term loan due July 2026 (the “$ 150 M Term Loan”), and (iv) the $ 300 M Term Loan that matures in July 2029, each of which bears interest at a rate of SOFR plus a credit spread.

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The agreements related to the $ 150 M Term Loan and $ 300 M Term Loan include 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 in each agreement.

The following table summarizes the key terms of the unsecured term loans as of June 30, 2023 (dollars in thousands) :

The following table summarizes the key terms of the unsecured term loans as of September 30, 2023 (dollars in thousands) :

Unsecured Term Loans

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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 (in thousands) :

Six Months Ended June 30,

Nine Months Ended September 30,

Amortization of debt issuance costs $ 2,685 $ 2,169

Fair Value of Fixed and Variable Rate Debt

As of June 30, 2023, the estimated fair value of fixed rate debt was $ 1.9 billion compared to the book value of $ 2.1 billion.

As of September 30, 2023, the estimated fair value of fixed rate debt was $ 1.8 billion compared to the book value of $ 2.0 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 6.22 % to 8.20 %.

As of June 30, 2023, the estimated fair value of variable rate debt was $ 850.5 million compared to the book value of $ 847.9 million.

As of September 30, 2023, the estimated fair value of variable rate debt was $ 880.2 million compared to the book value of $ 876.6 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 6.47 % to 7.42 %.

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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.

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 June 30, 2023 and December 31, 2022 (dollars in thousands) :

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, 2023 and December 31, 2022 (dollars in thousands) :

Fair Value Assets (Liabilities) (1)

Type of Hedge Number of Instruments Aggregate Notional Reference Rate Interest Rate Effective Date Maturity Date June 30, 2023 December 31, 2022

Type of Hedge Number of Instruments Aggregate Notional Reference Rate Interest Rate Effective Date Maturity Date September 30, 2023 December 31, 2022

Cash Flow Four $ 250,000 SOFR 2.99 % 12/1/2022 10/24/2025 $ 9,158 $ 7,134

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Fair Value (2)

Two $ 155,000 LIBOR LIBOR + 3.70 %

Two $ 155,000 SOFR SOFR + 3.70 %

4/23/2021 9/10/2025 $ ( 12,791 ) $ ( 14,177 )

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(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 %.

(2) On July 1, 2023, the fallback rate in the derivative agreements went into effect.

The derivative agreements swap a blended fixed rate of 4.52 % for a blended floating rate of three-month SOFR plus 3.70 % as of September 30, 2023 and three-month LIBOR plus 3.70 % as of December 31, 2022.

In October 2022, we terminated two forward-starting interest rate swaps with notional amounts totaling $ 150.0 million and a maturity date of June 1, 2032 and received $ 30.9 million upon termination.

This settlement is included as a component of “Accumulated other comprehensive income” in the accompanying consolidated balance sheets and is being reclassified to earnings over time as the hedged items are recognized in earnings.

During the six months ended June 30, 2023, we accelerated the reclassification of $ 1.5 million in accumulated other comprehensive income as a reduction to interest expense as a result of a portion of the hedged forecasted transaction becoming probable not to occur.

During the nine months ended September 30, 2023, we accelerated the reclassification of $ 3.1 million in accumulated other comprehensive income as a reduction to interest expense as a result of a portion of the hedged forecasted transaction becoming probable not to occur.

We currently expect that the debt issuance will occur during 2023.

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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 use Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.

As of June 30, 2023 and December 31, 2022, 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 of September 30, 2023 and December 31, 2022, 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 $ 3.5 million and $ 7.7 million was reclassified as an increase to earnings during the three and six months ended June 30, 2023, respectively.

Approximately $ 3.3 million and $ 7.4 million was reclassified as a decrease to earnings during the three and six months ended June 30, 2022, respectively.

Approximately $ 5.5 million and $ 13.2 million was reclassified as an increase to earnings during the three and nine months ended September 30, 2023, respectively.

Approximately $ 1.2 million and $ 8.6 million was reclassified as a decrease to earnings during the three and nine months ended September 30, 2022, respectively.

As interest payments on our derivatives are made over the next 12 months, we estimate the decrease to interest expense to be approximately $ 28.4 million, assuming the current SOFR curve.

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Distributions

Our Board of Trustees declared a cash distribution of $ 0.24 per common share and Common Unit for the second quarter of 2023.

This distribution was paid on July 14, 2023 to common shareholders and Common Unit holders of record as of July 7, 2023.

For the six months ended June 30, 2023, we declared cash distributions totaling $ 0.48 per common share and Common Unit.

For the three and six months ended June 30, 2022, we declared cash distributions of $ 0.21 and $ 0.41 , respectively, per common share and Common Unit.

Our Board of Trustees declared a cash distribution of $ 0.24 per common share and Common Unit for the third quarter of 2023.

This distribution was paid on October 13, 2023 to common shareholders and Common Unit holders of record as of October 6, 2023.

For the nine months ended September 30, 2023, we declared cash distributions totaling $ 0.72 per common share and Common Unit.

For the three and nine months ended September 30, 2022, we declared cash distributions of $ 0.22 and $ 0.63 , respectively, per common share and Common Unit.

At-The-Market Offering Program

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The Operating Partnership may also use the net proceeds for acquisitions of operating properties and the development or redevelopment of properties, although there are currently no understandings, commitments or agreements to do so.

As of June 30, 2023, the Company has no t sold any common shares under the ATM Program.

As of September 30, 2023, the Company has no t sold any common shares under the ATM Program.

Share Repurchase Program

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In February 2023, the Company extended the Share Repurchase Program for an additional year so it will now terminate on February 28, 2024, if not terminated or extended prior to that date.

As of June 30, 2023, the Company has no t repurchased any shares under the Share Repurchase Program.

As of September 30, 2023, the Company has no t repurchased any shares under the Share Repurchase Program.

EARNINGS PER SHARE OR UNIT

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(ii) Limited Partner Units, which may be exchanged for either cash or common shares at the Parent Company’s option and under certain circumstances;

(iii) appreciation-only Long-Term Incentive Plan (“AO LTIP”) units;

(iii) AO LTIP Units;

and (iv) deferred common share units, which may be credited to the personal accounts of non-employee trustees in lieu of compensation paid in cash or the issuance of common shares to such trustees.

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 those amounts in the denominator would have no dilutive impact.

Weighted average Limited Partner Units outstanding were 3.0 million for the three and six months ended June 30, 2023, and 2.8 million and 2.6 million for the three and six months ended June 30, 2022, respectively.

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

Weighted average Limited Partner Units outstanding were 3.3 million and 3.1 million for the three and nine months ended September 30, 2023, and 3.0 million and 2.7 million for the three and nine months ended September 30, 2022, respectively.

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

COMMITMENTS AND CONTINGENCIES

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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, 2023, the outstanding loan balance was $ 33.1 million, of which our share was $ 11.6 million.

As of September 30, 2023, the outstanding loan balance was $ 32.9 million, of which our share was $ 11.5 million.

The loan is secured by the hotel.

In 2021, we provided repayment and completion guaranties on loans totaling $ 66.2 million associated with the development of The Corner mixed-use project in the Indianapolis MSA.

As of June 30, 2023, the outstanding balance of the loans was $ 44.5 million, of which our share was $ 22.2 million.

As of June 30, 2023, we had outstanding letters of credit totaling $ 0.3 million with no amounts advanced against these instruments.

As of September 30, 2023, the outstanding balance of the loans was $ 52.4 million, of which our share was $ 26.2 million.

As of September 30, 2023, we had outstanding letters of credit totaling $ 0.3 million with no amounts advanced against these instruments.

Legal Proceedings

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Management believes that such matters will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows taken as a whole.

SUBSEQUENT EVENTS

Subsequent to June 30, 2023, we amended the loan agreement on a $ 27.9 million variable rate mortgage payable to extend the maturity date to August 4, 2026, with a one-year extension option.

In addition, the interest rate margin increased to 215 basis points.

In conjunction with the extension, we made a $ 9.9 million paydown of the principal balance using available cash on hand.

On August 7, 2023, a wholly owned subsidiary of the Company (“KRG Development”) assigned to Pan Am Development Partners, LLC (“Assignee”) certain rights and obligations created by a certain project agreement for the development of a hotel on the Pan Am Plaza site across from the Indiana Convention Center in Indianapolis, IN, including certain future development rights and a right of first offer involving the project (collectively, the “Project Rights and Obligations”).

RELATED PARTY TRANSACTIONS

On August 7, 2023, a wholly owned subsidiary of the Company (“KRG Development”) assigned to Pan Am Development Partners, LLC (“Assignee”) certain rights and obligations related to the development of a hotel on the Pan Am Plaza site across from the Indiana Convention Center in Indianapolis, IN, including certain future development rights and a right of first offer involving the project (collectively, the “Project Rights and Obligations”).

Assignee is a wholly owned subsidiary of Circle Block Investors, LLC, the parent company that owns the Conrad Indianapolis hotel, of which Mr.

Kite, our Chairman Emeritus and the father of John A.

Kite, our Chairman Emeritus and the father of Mr.

Kite, is the majority owner, and Mr.

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McGowan, our President and Chief Operating Officer, are minority owners.

In connection with the transaction, Assignee assumed all Project Rights and Obligations from and after August 7, 2023 and will pay KRG Development an assignment fee of up to $ 3.5 million (the “Assignment Fee”), which is due and payable upon the completion of certain development activities that are expected to occur in 2024.

In connection with the transaction, Assignee assumed all Project Rights and Obligations from and after August 7, 2023 and agreed to pay KRG Development an assignment fee of up to $ 3.5 million (the “Assignment Fee”), which is due and payable upon the completion of certain development activities that are expected to occur in 2024.

In connection with the transactions, Mr.

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The Transaction Committee engaged a third-party financial advisor to assist it in determining the net value of the Project Rights and Obligations and establishing the Assignment Fee.

SUBSEQUENT EVENTS

Subsequent to September 30, 2023, we closed on the disposition of Eastside, a 43,640 square foot multi-tenant retail property in the Dallas MSA, which was classified as held for sale as of September 30, 2023, for a gross sales price of $ 14.4 million and no gain or loss on sale due to previously recognized impairment charges.

A portion of the proceeds was used to repay amounts outstanding on the Revolving Facility.

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