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Form 10-Q Sila Realty Trust, Inc. For: Jun 30

August 9, 2022 1:30 PM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 000-55435
cik0001567925-20220630_g1.jpg
SILA REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland46-1854011
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
1001 Water Street, Suite 800
Tampa, FL 33602
(813)-287-0101
(Address of Principal Executive Offices; Zip Code)(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
Title of each classTrading SymbolName of each exchange on which registered
N/AN/AN/A
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer 
  Accelerated filer 
Non-accelerated filer 
  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  ☒
As of August 4, 2022, there were approximately 168,138,000 shares of Class A common stock, 16,645,000 shares of Class I common stock, 40,790,000 shares of Class T common stock and 0 shares of Class T2 common stock of Sila Realty Trust, Inc. outstanding.



SILA REALTY TRUST, INC.
(A Maryland Corporation)
TABLE OF CONTENTS
  Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
SILA REALTY TRUST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
June 30, 2022
December 31, 2021
ASSETS
Real estate:
Land$166,037 $163,992 
Buildings and improvements, less accumulated depreciation of $185,986 and $165,784, respectively
1,672,831 1,648,685 
Construction in progress 14,628 
Total real estate, net1,838,868 1,827,305 
Cash and cash equivalents23,077 32,359 
Acquired intangible assets, less accumulated amortization of $80,049 and $71,067, respectively
173,127 181,639 
Goodwill23,006 23,284 
Right-of-use assets - operating leases24,995 21,737 
Right-of-use assets - finance lease2,286 2,296 
Other assets, net85,234 66,365 
Assets held for sale, net 22,570 
Total assets$2,170,593 $2,177,555 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Credit facility, net of deferred financing costs of $2,728 and $3,226, respectively
502,272 496,774 
Accounts payable and other liabilities27,854 39,597 
Acquired intangible liabilities, less accumulated amortization of $5,177 and $4,444, respectively
12,692 12,962 
Operating lease liabilities27,469 23,758 
Finance lease liabilities2,638 2,636 
Liabilities held for sale, net 698 
Total liabilities572,925 576,425 
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding
  
Common stock, $0.01 par value per share, 510,000,000 shares authorized; 239,848,129 and 238,226,119 shares issued, respectively; 225,240,223 and 224,179,939 shares outstanding, respectively
2,252 2,242 
Additional paid-in capital2,014,252 2,004,404 
Accumulated distributions in excess of earnings(432,101)(400,669)
Accumulated other comprehensive income (loss)13,265 (4,847)
Total stockholders’ equity1,597,668 1,601,130 
Total liabilities and stockholders’ equity$2,170,593 $2,177,555 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

SILA REALTY TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except share data and per share amounts)
(Unaudited)
 Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Revenue:
Rental revenue$44,918 $43,747 $89,200 $86,169 
Expenses:
Rental expenses3,010 3,275 6,035 6,489 
General and administrative expenses7,744 6,639 14,600 13,262 
Depreciation and amortization17,814 17,615 35,802 35,839 
Impairment loss on real estate 6,502 7,109 16,925 
Impairment loss on goodwill 431 278 671 
Total expenses28,568 34,462 63,824 73,186 
Gain on real estate disposition  460  
Income from operations16,350 9,285 25,836 12,983 
Interest and other expense, net4,329 9,534 12,444 18,298 
Income (loss) from continuing operations12,021 (249)13,392 (5,315)
Income from discontinued operations 16,305  24,253 
Net income attributable to common stockholders$12,021 $16,056 $13,392 $18,938 
Other comprehensive income:
Unrealized income on interest rate swaps, net$5,257 $1,775 $18,112 $7,567 
Other comprehensive income5,257 1,775 18,112 7,567 
Comprehensive income attributable to common stockholders$17,278 $17,831 $31,504 $26,505 
Weighted average number of common shares outstanding:
Basic225,008,452 223,082,912 224,755,285 222,783,708 
Diluted226,362,977 223,082,912 226,115,545 222,783,708 
Net income per common share attributable to common stockholders:
Basic:
Continuing operations$0.05 $ $0.06 $(0.02)
Discontinued operations 0.07  0.11 
Net income attributable to common stockholders$0.05 $0.07 $0.06 $0.09 
Diluted:
Continuing operations$0.05 $ $0.06 $(0.02)
Discontinued operations 0.07  0.11 
Net income attributable to common stockholders$0.05 $0.07 $0.06 $0.09 
Distributions declared per common share$0.10 $0.12 $0.20 $0.24 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

SILA REALTY TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
(Unaudited)
Common Stock
No. of
Shares
Par
Value
Additional
Paid-in
Capital
Accumulated Distributions in Excess of EarningsAccumulated Other Comprehensive IncomeTotal
Stockholders’
Equity
Balance, March 31, 2022224,616,042 $2,246 $2,008,481 $(421,561)$8,008 $1,597,174 
Issuance of common stock under the distribution reinvestment plan765,065 8 6,270 — — 6,278 
Vesting of restricted stock76,150 — — — — — 
Stock-based compensation— 1 1,277 — — 1,278 
Repurchase of common stock(217,034)(3)(1,776)— — (1,779)
Distributions to common stockholders— — — (22,561)— (22,561)
Other comprehensive income— — — — 5,257 5,257 
Net income— — — 12,021 — 12,021 
Balance, June 30, 2022225,240,223 $2,252 $2,014,252 $(432,101)$13,265 $1,597,668 


Common Stock
No. of
Shares
Par
Value
Additional
Paid-in
Capital
Accumulated Distributions in Excess of EarningsAccumulated Other Comprehensive (Loss) IncomeTotal
Stockholders’
Equity
Balance, December 31, 2021224,179,939 $2,242 $2,004,404 $(400,669)$(4,847)$1,601,130 
Issuance of common stock under the distribution reinvestment plan1,497,873 15 12,275 — — 12,290 
Vesting of restricted stock124,136 — — — — — 
Stock-based compensation— 1 2,173 — — 2,174 
Repurchase of common stock(561,725)(6)(4,600)— — (4,606)
Distributions to common stockholders— — — (44,824)— (44,824)
Other comprehensive income — — — — 18,112 18,112 
Net income— — — 13,392 — 13,392 
Balance, June 30, 2022225,240,223 $2,252 $2,014,252 $(432,101)$13,265 $1,597,668 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

SILA REALTY TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
(Unaudited)
Common Stock
No. of
Shares
Par
Value
Additional
Paid-in
Capital
Accumulated Distributions in Excess of EarningsAccumulated Other Comprehensive LossTotal
Stockholders’
Equity
Balance, March 31, 2021222,702,903 $2,227 $1,989,599 $(335,004)$(14,652)$1,642,170 
Issuance of common stock under the distribution reinvestment plan857,926 8 7,451 — — 7,459 
Stock-based compensation— — 563 — — 563 
Distribution and servicing fees— — 74 — — 74 
Repurchase of common stock(275,242)(2)(2,389)— — (2,391)
Distributions to common stockholders— — — (26,993)— (26,993)
Other comprehensive income— — — — 1,775 1,775 
Net income— — — 16,056 — 16,056 
Balance, June 30, 2021223,285,587 $2,233 $1,995,298 $(345,941)$(12,877)$1,638,713 
Common Stock
No. of
Shares
Par
Value
Additional
Paid-in
Capital
Accumulated Distributions in Excess of EarningsAccumulated Other Comprehensive LossTotal
Stockholders’
Equity
Balance, December 31, 2020222,045,522 $2,220 $1,983,361 $(311,264)$(20,444)$1,653,873 
Issuance of common stock under the distribution reinvestment plan1,706,088 17 14,816 — — 14,833 
Vesting of restricted stock3,311 — — — — — 
Stock-based compensation— — 1,119 — — 1,119 
Distribution and servicing fees— — 76 — — 76 
Repurchase of common stock(469,334)(4)(4,074)— — (4,078)
Distributions to common stockholders— — — (53,615)— (53,615)
Other comprehensive income— — — — 7,567 7,567 
Net income— — — 18,938 — 18,938 
Balance, June 30, 2021223,285,587 $2,233 $1,995,298 $(345,941)$(12,877)$1,638,713 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

SILA REALTY TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 Six Months Ended
June 30,
 20222021
Cash flows from operating activities:
Net income attributable to common stockholders$13,392 $18,938 
Adjustments to reconcile net income attributable to common stockholders to net cash provided by operating activities:
Depreciation and amortization - real estate including intangible assets35,754 47,554 
Depreciation - corporate assets38  
Amortization of deferred financing costs854 2,007 
Amortization of above- and below-market leases240 (1,252)
Amortization of origination fee 138 
Amortization of discount of deferred liability 109 
Amortization of interest rate swaps995  
Amortization of operating leases516 476 
Amortization of finance lease10 9 
Impairment loss on real estate7,109 16,925 
Impairment loss on goodwill278 671 
Gain on real estate disposition from continuing operations(460) 
Loss on extinguishment of debt3,367  
Straight-line rent adjustments(4,941)(9,078)
Stock-based compensation2,174 1,119 
Changes in operating assets and liabilities:
Accounts payable and other liabilities(4,124)3,195 
Other assets1,551 308 
Net cash provided by operating activities56,753 81,119 
Cash flows from investing activities:
Investment in real estate(42,428)(25,048)
Consideration paid for the internalization transaction (7,500)
Proceeds from real estate disposition22,822  
Capital expenditures(6,477)(14,743)
Payments of deal costs(32) 
Real estate deposits, net(1,134) 
Collection of notes receivable 500 
Net cash used in investing activities(27,249)(46,791)
Cash flows from financing activities:
Payments on notes payable (2,238)
Proceeds from credit facility740,000 15,000 
Payments on credit facility(735,000) 
Payments for extinguishment of debt(4)(95)
Payments of deferred financing costs(6,936)(92)
Repurchase of common stock(4,606)(4,078)
Offering costs on issuance of common stock(193)(1,232)
Distributions to common stockholders(32,401)(38,955)
Net cash used in financing activities(39,140)(31,690)
Net change in cash, cash equivalents and restricted cash(9,636)2,638 
Cash, cash equivalents and restricted cash - Beginning of period32,880 67,909 
Cash, cash equivalents and restricted cash - End of period$23,244 $70,547 
Supplemental cash flow disclosure:
Interest paid, net of interest capitalized of $44 and $212, respectively
$7,918 $24,878 
Supplemental disclosure of non-cash transactions:
Common stock issued through distribution reinvestment plan$12,290 $14,833 
Change in accrued distributions to common stockholders$133 $173 
Change in contingent consideration$182 $ 
Change in accrued capital expenditures$(2,731)$910 
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Change in accrued acquisition costs$22 $ 
Change in accrued deal costs$57 $ 
Change in accrued deferred financing costs$(19)$53 
Recognition of right-of-use assets - operating leases$3,749 $ 
Recognition of operating lease liabilities$3,749 $ 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8

SILA REALTY TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2022
Note 1—Organization and Business Operations
Sila Realty Trust, Inc., or the Company, is a Maryland corporation that was formed on January 11, 2013. The Company elected, and currently qualifies, to be taxed as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes commencing with its taxable year ended December 31, 2014. Substantially all of the Company’s business is conducted through Sila Realty Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership, formed on January 10, 2013. The Company is the sole general partner of the Operating Partnership.
The Company was formed to invest primarily in high quality income-producing commercial real estate, with a focus on data centers and healthcare properties, preferably with long-term leases to creditworthy tenants, as well as to make other real estate-related investments in such property types, which may include equity or debt interests in other real estate entities.
During the second quarter of 2021, the Company's board of directors, or the Board, made a determination to sell the Company's data center properties. On May 19, 2021, the Company and certain of its wholly-owned subsidiaries entered into a purchase and sale agreement, or the PSA, for the sale of up to 29 data center properties owned by the Company, which constituted the entirety of the Company's data center segment. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. The decision of the Board to sell the data center properties, as well as the execution of the PSA, represented a strategic shift that had a major effect on the Company's results and operations for the periods presented. As of December 31, 2021, the Company had no assets or liabilities related to the data center properties. The operations of the data center properties have been classified as income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021.
On July 22, 2021, the Company completed the sale of all 29 of its data centers, or the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. Concurrently, the Board declared a special cash distribution of $1.75 per share of Class A, Class I, Class T and Class T2 shares of common stock. The special cash distribution was funded with the proceeds from the Data Center Sale. The special cash distribution was paid on July 30, 2021 to stockholders of record at the close of business on July 26, 2021, in the aggregate amount of approximately $392,685,000.
During the six months ended June 30, 2022, the Company acquired five healthcare properties and sold one land parcel that formerly contained a healthcare property. See Note 3—"Acquisitions and Dispositions" for more information. As of June 30, 2022, the Company owned 130 real estate healthcare properties and two undeveloped land parcels, in two micropolitan statistical areas, or µSA, and 55 metropolitan statistical areas, or MSAs.
The Company raised the equity capital for its real estate investments through two public offerings, or the Offerings, from May 2014 through November 2018, and the Company has offered shares pursuant to its distribution reinvestment plan, or the DRIP, pursuant to two Registration Statements on Form S-3, or each, a DRIP Offering and together the DRIP Offerings, since November 2017.
Except as the context otherwise requires, the “Company” refers to Sila Realty Trust, Inc., the Operating Partnership and all wholly-owned subsidiaries.
Note 2—Summary of Significant Accounting Policies
The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the responsibility of management. These accounting policies conform to United States generally accepted accounting principles, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of a normal and recurring nature considered for a fair presentation, have been included. Operating results for the three and six months ended June 30, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
The condensed consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s
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audited consolidated financial statements as of and for the year ended December 31, 2021, and related notes thereto set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on March 29, 2022.
Principles of Consolidation and Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the condensed consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Restricted Cash
Restricted cash consists of restricted cash held in escrow, which includes cash held by escrow agents in escrow accounts for tenant and capital improvements in accordance with the respective tenants' lease agreement. Restricted cash attributable to continuing operations is reported in other assets, net, in the accompanying condensed consolidated balance sheets. See Note 8—"Other Assets, Net."
The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals shown in the condensed consolidated statements of cash flows (amounts in thousands):
Six Months Ended
June 30,
20222021
Beginning of period:
Cash and cash equivalents$32,359 $53,174 
Restricted cash521 14,735 
(1)
Cash, cash equivalents and restricted cash$32,880 $67,909 
End of period:
Cash and cash equivalents$23,077 $47,921 
Restricted cash167 

22,626 
(2)
Cash, cash equivalents and restricted cash$23,244 $70,547 
(1)Of this amount, $13,499,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations.
(2)Of this amount, $21,390,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations.
Held for Sale and Discontinued Operations
The Company classifies a real estate property as held for sale upon satisfaction of all of the following criteria: (i) management commits to a plan to sell a property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such properties; (iii) there is an active program to locate a buyer; (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year; (v) the property is being actively marketed for sale; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Upon the determination to classify a property as held for sale, the Company ceases depreciation and amortization on the real estate property held for sale, as well as the amortization of acquired in-place leases and right-of-use assets. The real estate property held for sale and associated liabilities are classified separately on the condensed consolidated balance sheets. Such properties are recorded at the lesser of the carrying value or estimated fair value less estimated costs to sell.
As of December 31, 2021, the Company classified one land parcel that formerly contained a healthcare property as held for sale, or the 2021 Land Held for Sale. The Company recorded the 2021 Land Held for Sale at its carrying value at December 31, 2021. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. On February 10, 2022, the
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Company sold the 2021 Land Held for Sale, for an aggregate sale price of $24,000,000, and generated net proceeds of approximately $22,701,000. See Note 3—"Acquisitions and Dispositions" for additional information.
The Company classified assets and liabilities of the 29-property data center properties as discontinued operations for all the periods presented because they represented a strategic shift that had a major effect on the Company's results and operations. As of December 31, 2021, the Company had no assets or liabilities related to the data center properties. The operations of the data center properties are classified on the condensed consolidated statements of comprehensive income as income from discontinued operations for the three and six months ended June 30, 2021. On July 22, 2021, the Company completed the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. See Note 3—"Acquisitions and Dispositions" for additional information.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate assets may not be recoverable, the Company assesses the recoverability of the asset group by estimating whether the Company will recover the carrying value of the asset group through its undiscounted future cash flows and their eventual disposition. Based on this analysis, if the Company does not believe that it will be able to recover the carrying value of the asset group, the Company will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset group.
When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental rates subsequent to the expiration of current lease arrangements, property operating expenses, terminal capitalization and discount rates, probability weighting of the potential re-lease of the property versus sales scenarios, sale prices of comparable properties, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in the future cash flow analysis could result in a different determination of the property’s future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets.
In addition, the Company estimates the fair value of the assets by applying a market approach using comparable sales for certain properties. The use of alternative assumptions in the market approach analysis could result in a different determination of the property’s estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate assets.
Impairment of Real Estate
The Company determined that, during the three months ended March 31, 2022, real estate assets related to one healthcare property, or the First Quarter 2022 Impaired Property, were determined to be impaired. A healthcare tenant that occupies 90% of the property, leases its space for administrative use and has historically been using the space as its central business office. As a result of pandemic related events, the tenant permanently modified its business operations to accommodate a reduction in on-site staff, significantly reducing its need for administrative space going forward. The tenant has continued to pay its rent in accordance with the lease agreement, however indicated it would not expect to renew the lease upon expiration. The Company entered into a signed letter of intent with a prospective buyer that is a county-owned, tax-exempt entity, and requires ownership (vs. leasing) of the property to conduct its intended business operations at the property. In addition to the signed letter of intent with the prospective buyer, the Company signed a letter of intent with the tenant for the payment of an early lease termination fee. The early lease termination is effective only upon consummating a sale of the property to the prospective buyer. The inclusion of this potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $14,639,000, resulting in an impairment charge of $7,109,000.
The Company had no real estate impairment during the three months ended June 30, 2022.
During the three months ended March 31, 2021, real estate assets related to one healthcare property, or the First Quarter 2021 Impaired Property, were determined to be impaired. A tenant of the property that was experiencing financial difficulty vacated its space on June 19, 2020. During the fourth quarter of 2020, the Company entered into lease negotiations with a prospective tenant for the property, but the Company did not reach an agreement with the tenant. As such, the Company evaluated other strategic options, including a possible sale, and in April 2021, the Company received a letter of intent from a prospective buyer. The inclusion of a potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $17,145,000, resulting in an impairment charge of $10,423,000. The property was subsequently sold in the fourth quarter of 2021.
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During the three months ended June 30, 2021, real estate assets related to one healthcare property, or the Second Quarter 2021 Impaired Property One, were determined to be impaired. The tenant of the property was experiencing financial difficulty and vacated the space in March 2021. Subsequently, during the second quarter, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. The Company utilized a market approach, using comparable properties, to estimate the fair value of the property. As a result, the carrying value of the property was reduced to its estimated fair value of $5,957,000, resulting in an impairment charge of $2,894,000.
Additionally, during the three months ended June 30, 2021, real estate assets related to the 2021 Land Held for Sale, or the Second Quarter 2021 Impaired Property Two, were determined to be impaired. The last of the three tenants that occupied the building terminated its lease agreement and vacated the space on July 12, 2021. Subsequently, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated the fair value of $22,311,000, resulting in an impairment charge of $3,608,000.
Impairment charges are recorded as impairment loss on real estate in the condensed consolidated statements of comprehensive income.
During the three months ended June 30, 2021, the Company accelerated depreciation of equipment at the Second Quarter 2021 Impaired Property Two based on its anticipated sale. As a result, the Company accelerated the depreciation of the equipment in the amount of $296,000 in depreciation and amortization expense in the condensed consolidated statements of comprehensive income.
Impairment of Acquired Intangible Assets and Acquired Intangible Liabilities
During the three months ended June 30, 2022 and 2021, the Company did not record impairment of acquired intangible assets.
During the six months ended June 30, 2022, the Company recognized an impairment of one in-place lease intangible asset, or the First Quarter 2022 Impaired In-Place Lease, in the amount of approximately $380,000, by accelerating the amortization of the acquired intangible asset related to a tenant of the First Quarter 2022 Impaired Property.
During the six months ended June 30, 2021, the Company recognized an impairment of one in-place lease intangible asset, or the First Quarter 2021 Impaired In-Place Lease, in the amount of approximately $1,120,000, by accelerating the amortization of the acquired intangible asset related to one healthcare tenant of the Second Quarter 2021 Impaired Property One that was experiencing financial difficulties and vacated the property in March 2021. On April 5, 2021, the Company terminated its lease agreement and the tenant paid a lease termination fee of $400,000, which was recorded in rental revenue in the condensed consolidated statements of comprehensive income.
During the three and six months ended June 30, 2022 and 2021, the Company did not record impairment of acquired intangible liabilities.
Impairment of Goodwill
Goodwill represents the excess of the amount paid over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is allocated to an entity's reporting units. Goodwill has an indefinite life and is not amortized. On July 28, 2020, the Company and the Operating Partnership entered into a Membership Interest Purchase Agreement to provide for the internalization of the external management functions previously performed for the Company and the Operating Partnership by its former advisor and its affiliates, or the Internalization Transaction. On September 30, 2020, the Company closed the Internalization Transaction. On September 30, 2020, the Company recorded $39,529,000 of goodwill related to the transaction, of which $15,574,000 was allocated to the data center properties and written off as a result of the Data Center Sale on July 22, 2021. The remaining $23,955,000 of goodwill was allocated to the healthcare segment.
The Company evaluates goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, and at least annually. Unless circumstances otherwise dictate, the annual impairment test is performed as of the last day of each year. The Company evaluates potential triggering events that may affect the estimated fair value of the Company’s reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have a significant impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. If the carrying value of a reporting unit exceeds its estimated fair value, then an impairment charge is recorded in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
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The Company has the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Under a qualitative assessment, the impairment analysis for goodwill represents an evaluation of whether it is more-likely-than-not the reporting unit's fair value is less than its carrying value, including goodwill. If a qualitative analysis indicates that it is more-likely-than-not that the estimated carrying value of a reporting unit, including goodwill, exceeds its fair value, the Company performs the quantitative analysis as described below.
During the three months ended March 31, 2022, the Company recognized $278,000 of goodwill impairment. Impairment loss on the First Quarter 2022 Impaired Property recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered an evaluation of the reporting unit's fair value for goodwill impairment. The Company's reporting unit represents each individual operating real estate property. The carrying value of long-lived assets within the reporting unit with indicators of impairment was first tested for recoverability and resulted in recognition of impairment during such period. As a result, the fair value of the reporting unit was determined to be lower than its carrying value, including goodwill. Therefore, the Company recognized an impairment loss on goodwill in the amount of $278,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to the reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach. As of March 31, 2022, the Company did not have any goodwill associated with the reporting unit.
The Company had no goodwill impairment during the three months ended June 30, 2022.
During the three months ended March 31, 2021, the Company recognized $240,000 of goodwill impairment. Impairment loss on the First Quarter 2021 Impaired Property recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered an evaluation of the reporting unit's fair value for goodwill impairment. As a result, the fair value of the reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill in the amount of $240,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to the reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach, using comparable sales to estimate the fair value. As of March 31, 2021, the Company did not have any goodwill associated with the reporting unit.
During the three months ended June 30, 2021, the Company recognized $431,000 of goodwill impairment. Impairment losses on the Second Quarter 2021 Impaired Property One and Second Quarter 2021 Impaired Property Two recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered evaluation of each reporting unit's fair value for goodwill impairment. As a result, the fair value of each reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill for each of the two reporting units in the amounts of $112,000 and $319,000, respectively, for the amount that the carrying value of each reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to each reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of each reporting unit was determined based on a market approach model. As of June 30, 2021, the Company did not have any goodwill associated with these healthcare reporting units.
The following table summarizes the rollforward of goodwill for the six months ended June 30, 2022 (amounts in thousands):
Goodwill
Balance as of December 31, 2021$23,284 
Impairment losses(278)
Balance as of June 30, 2022$23,006 
Revenue Recognition, Tenant Receivables and Allowance for Uncollectible Accounts
The majority of the Company's revenue is derived from rental revenue, which is accounted for in accordance with ASC 842, Leases, or ASC 842. In accordance with ASC 842, rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). For lease arrangements when it is not probable that the Company will collect all or substantially all of the remaining lease payments under the term of the lease, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. Tenant reimbursements, which are comprised of additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are recognized when the services are provided and the performance obligations are satisfied.
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The Company recognizes non-rental related revenue in accordance with Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers, or ASC 606. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursements, which are outside the scope of ASC 606. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Non-rental revenue, subject to ASC 606, is immaterial to the Company's condensed consolidated financial statements.
On April 22, 2021, the Company entered into a settlement agreement with a data center property tenant that was experiencing financial difficulty due to deteriorating economic conditions driven by the impact of the COVID-19 pandemic and accelerating its modification of work strategy to a remote environment due to the pandemic. The tenant stopped paying rent in October 2020. Pursuant to the settlement agreement, the lease was terminated, effective immediately. The tenant surrendered the space on June 20, 2021. Additionally, in connection with the lease termination, the tenant paid the Company a $7,000,000 termination fee on April 23, 2021, which was recorded in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income during the second quarter of 2021.
Concentration of Credit Risk and Significant Leases
As of June 30, 2022, the Company had cash on deposit, including restricted cash, in certain financial institutions that had deposits in excess of current federally insured levels. The Company limits its cash investments to financial institutions with high credit standings; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has not experienced a loss or lack of access to cash in its accounts.
As of June 30, 2022, the Company owned real estate investments in two µSAs and 55 MSAs, one MSA of which accounted for greater than 10.0% of rental revenue from continuing operations for the six months ended June 30, 2022. Real estate investments located in the Houston-The Woodlands-Sugar Land, Texas MSA accounted for 11.1% of rental revenue from continuing operations for the six months ended June 30, 2022.
As of June 30, 2022, the Company had one exposure to tenant concentration that accounted for greater than 10.0% of rental revenue from continuing operations for the six months ended June 30, 2022. The leases with tenants at healthcare properties under common control of Post Acute Medical, LLC and its affiliates accounted for 15.3% of rental revenue from continuing operations for the six months ended June 30, 2022.
Share Repurchase Program
The Company’s Amended and Restated Share Repurchase Program, or SRP, allows for repurchases of shares of the Company’s common stock upon meeting certain criteria. The SRP provides that all repurchases during any calendar year, including those redeemable upon death or a "Qualifying Disability" (as defined in the Company's SRP) of a stockholder, be limited to those that can be funded with equivalent proceeds raised from the DRIP during the prior calendar year and other operating funds, if any, as the Board, in its sole discretion, may reserve for this purpose.
Repurchases of shares of the Company’s common stock are at the sole discretion of the Board, provided, however, that the Company limits the number of shares repurchased during any calendar year to 5.0% of the total number of shares of common stock outstanding as of December 31st of the previous calendar year. The SRP is subject to terms and limitations, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation and DRIP funding limitations and any amendments to the plan, as more fully described below. In addition, the Board, in its sole discretion, may suspend (in whole or in part) the SRP at any time, and may amend, reduce, terminate or otherwise change the SRP upon 30 days' prior notice to the Company’s stockholders for any reason it deems appropriate.
The Company will currently only repurchase shares due to death and involuntary exigent circumstances in accordance with the SRP, subject in each case to the terms and limitations of the SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation, and DRIP funding limitations. Under the SRP, the Company may waive certain of the terms and requirements of the SRP in the event of the death of a stockholder who is a natural person, including shares held through an Individual Retirement Account or other retirement or profit-sharing plan, and certain trusts meeting the requirements of the SRP. The Company may also waive certain of the terms and requirements of the SRP in the event of an involuntary exigent circumstance, as determined by the Company or any of the executive officers thereof, in its or their sole discretion. See Part II, Item 2. "Unregistered Sales of Equity Securities" for more information on the Company's SRP.
During the six months ended June 30, 2022, the Company repurchased 561,725 Class A shares, Class I shares and Class T shares of common stock (476,551 Class A shares, 20,611 Class I shares and 64,563 Class T shares), for an aggregate purchase price of approximately $4,606,000 (an average of $8.20 per share). During the six months ended June 30, 2021, the Company repurchased 469,334 Class A shares, Class I shares and Class T shares of common stock (443,434 Class A shares, 2,504 Class I shares and 23,396 Class T shares), for an aggregate purchase price of approximately $4,078,000 (an average of $8.69 per share).
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Stock-based Compensation
On March 6, 2020, the Board approved the Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, pursuant to which the Company has the authority and power to grant awards of restricted shares of its Class A common stock to its directors, officers and employees. The Company accounts for its stock awards in accordance with ASC 718-10, Compensation—Stock Compensation. ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). For performance-based awards, compensation costs are recognized over the service period if it is probable that the performance condition will be satisfied, with changes of the assessment at each reporting period and recording the effect of the change in the compensation cost as a cumulative catch-up adjustment. The compensation costs for restricted stock are recognized based on the fair value of the restricted stock awards at grant date less forfeitures (if applicable). Forfeitures are accounted for as they occur.
On January 3, 2022, the Company granted time-based awards to its executive officers, consisting of 217,988 in restricted shares of Class A common stock, or the Time-Based 2022 Awards. The Time-Based 2022 Awards will vest ratably over four years following the grant date, subject to each executive's employment through the applicable vesting dates, with certain exceptions.
In addition, on January 3, 2022, the Company's compensation committee approved performance-based deferred stock unit awards, or Performance DSUs, to be granted for performance-based awards, or the Performance-Based 2022 Awards. The Performance-Based 2022 Awards will be measured based on Company performance over a three-year performance period ending on December 31, 2024. The Performance-Based 2022 Awards vest after the last day of the performance period and are subject to continued employment through the applicable vesting date.
The Time-Based 2022 Awards and the Performance-Based 2022 Awards, or collectively, the 2022 Awards, were granted under and are subject to the terms of the A&R Incentive Plan and award agreements.
Stock-based compensation expense for the 2022 Awards for the three and six months ended June 30, 2022, was approximately $343,000 and $604,000, respectively, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income. The Company recognized accelerated stock-based compensation expense of $326,000 during the three and six months ended June 30, 2022, of which $92,000 related to the 2022 Awards, due to the termination of its former chief accounting officer on May 12, 2022. The Company recognized total stock-based compensation expense of approximately $1,278,000 and $563,000, respectively, for the three months ended June 30, 2022 and 2021, and $2,174,000 and $1,119,000, respectively, for the six months ended June 30, 2022 and 2021, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income.
Earnings Per Share
The Company calculates basic earnings per share by dividing net income attributable to common stockholders for the period by the weighted average shares of its common stock outstanding for that period. Diluted earnings per share is computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Shares of non-vested restricted common stock and Performance DSUs give rise to potentially dilutive shares of common stock. For the three and six months ended June 30, 2022, diluted earnings per share reflected the effect of approximately 1,355,000 and 1,360,000, respectively, of non-vested shares of restricted common stock and Performance DSUs that were outstanding. For the three and six months ended June 30, 2021, diluted earnings per share was computed the same as basic earnings per share, because the Company recorded a loss from continuing operations, which would make potentially dilutive shares of 964,000 and 952,000, respectively, related to non-vested shares of restricted common stock and Performance DSUs, anti-dilutive.
Reportable Segments
ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about an entity’s reportable segments. As of June 30, 2022 and December 31, 2021, 100% of the Company's consolidated revenues from continuing operations were generated from real estate investments in healthcare properties. The Company’s chief operating decision maker evaluates operating performance of healthcare properties on an individual property level, which are aggregated into one reportable segment due to their similar economic characteristics.
Derivative Instruments and Hedging Activities
As required by ASC 815, Derivatives and Hedging, or ASC 815, the Company records all derivative instruments at fair value as assets and liabilities on its condensed consolidated balance sheets. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
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In accordance with the fair value measurement guidance Accounting Standards Update, or ASU, 2011-04, Fair Value Measurement, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
The Company is exposed to variability in expected future cash flows that are attributable to interest rate changes in the normal course of business. The Company’s primary strategy in entering into derivative contracts is to add stability to future cash flows by managing its exposure to interest rate movements. The Company utilizes derivative instruments, including interest rate swaps, to effectively convert some of its variable rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes.
In accordance with ASC 815, the Company designates interest rate swap contracts as cash flow hedges of floating-rate borrowings. For derivative instruments that are designated and qualify as cash flow hedges, the gains or losses on the derivative instruments are reported as a component of other comprehensive income in the condensed consolidated statements of comprehensive income and are reclassified into earnings in the same line item associated with the forecasted transaction in the same period during which the hedged transactions affect earnings. See additional discussion in Note 12—"Derivative Instruments and Hedging Activities."
Note 3—Acquisitions and Dispositions
2022 Real Estate Property Acquisition
During the six months ended June 30, 2022, the Company purchased five real estate properties, or the 2022 Acquisitions, which were determined to be asset acquisitions. Upon the completion of the 2022 Acquisitions, the Company allocated the purchase price to acquired tangible assets, consisting of land, building and improvements and tenant improvements, and acquired intangible assets, consisting of in-place leases and above-market leases, and acquired intangible liabilities, consisting of below-market leases, based on the relative fair value method of allocating all accumulated costs.
The following table summarizes the consideration transferred for the 2022 Acquisitions during the six months ended June 30, 2022:
Property Description Date AcquiredOwnership PercentagePurchase Price
(amount in thousands)
Yukon Healthcare Facility03/10/2022100%$19,554 
Pleasant Hills Healthcare Facility05/12/2022100%14,303 
Prosser Healthcare Facilities (1)
05/20/2022100%8,593 
Total $42,450 
(1)     The Prosser Healthcare Facilities consist of three healthcare properties.
The following table summarizes the Company's purchase price allocation of the 2022 Acquisitions during the six months ended June 30, 2022 (amounts in thousands):
Total
Land$2,646 
Building and improvements35,021 
Tenant improvements2,040 
In-place leases2,752 
Above-market leases454 
Total assets acquired42,913 
Below-market leases(463)
Total liabilities acquired(463)
Net assets acquired$42,450 
Acquisition costs associated with transactions determined to be asset acquisitions are capitalized. The Company capitalized acquisition costs of approximately $454,000 related to the 2022 Acquisitions, which are included in the Company's allocation of the real estate acquisitions presented above. The total amount of all acquisition costs is limited to 6.0% of the contract purchase price of a property, unless the Board determines a higher transaction fee to be commercially competitive, fair and reasonable to the Company. The contract purchase price is the amount actually paid or allocated in respect of the purchase,
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development, construction or improvement of a property exclusive of acquisition costs. During the six months ended June 30, 2022, acquisition costs did not exceed 6.0% of the contract purchase price of the 2022 Acquisitions during such period.
2022 Real Estate Property Disposition
The Company sold one land parcel that formerly contained a healthcare property, or the 2022 Disposition, during the six months ended June 30, 2022, for an aggregate sale price of $24,000,000 and generated net proceeds of $22,701,000. For the six months ended June 30, 2022, the Company recognized an aggregate gain on sale of $460,000 in gain on real estate disposition in the condensed consolidated statements of comprehensive income.
The following table summarizes the 2022 Disposition:
Property DescriptionDisposition DateSale Price
(amounts in thousands)
Net Proceeds
(amounts in thousands)
Houston Healthcare Facility II02/10/2022$24,000 

$22,701 
Note 4—Held for Sale and Discontinued Operations
As of December 31, 2021, the Company had no assets or liabilities related to the data center properties. The operations of the data center properties have been classified as income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021.
On August 30, 2021, the Company entered into a purchase and sale agreement for the sale of the 2021 Land Held for Sale. The purchase and sale agreement required that the structures on the healthcare property be demolished prior to the sale. The structures on the property were demolished and the property consisted solely of land as of December 31, 2021. The Company classified the land as held for sale as of December 31, 2021, because the land met the held for sale criteria as outlined in Note 2—"Summary of Significant Accounting Policies -Held for Sale and Discontinued Operations." The Company sold the 2021 Land Held for Sale on February 10, 2022. See Note 3—"Acquisitions and Dispositions" for additional information.
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The following table presents the major classes of assets and liabilities of the 2021 Land Held for Sale, classified as assets and liabilities held for sale, net, presented separately in the condensed consolidated balance sheet as of December 31, 2021 (amounts in thousands):
December 31, 2021
Assets:
Real estate:
Land$22,241 
Total real estate, net22,241 
Other assets, net329 
Assets held for sale, net$22,570 
Liabilities:
Accounts payable and other liabilities698 
Liabilities held for sale, net$698 
The operations reflected in income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021, were as follows (amounts in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
20212021
Revenue:
Rental revenue$26,250 $51,723 
Lease termination revenue7,000 7,000 
Total revenue33,250 58,723 
Expenses:
Rental expenses9,576 15,992 
Depreciation and amortization3,981 11,724 
Total expenses13,557 27,716 
Interest and other expense, net (1)
3,388 6,754 
Income from discontinued operations16,305 24,253 
Net income from discontinued operations attributable to common stockholders$16,305 $24,253 
(1)    Interest expense attributable to discontinued operations for the three and six months ended June 30, 2021 was $3,402,000 and $6,771,000, respectively, which related to notes payable on certain data center properties. On July 22, 2021, in connection with the Data Center Sale, the Company paid off all data center and healthcare related notes payable, with an outstanding principal balance of $450,806,000 at the time of repayment.
Capital expenditures on a cash basis for the six months ended June 30, 2021, were $2,017,000, related to properties classified within discontinued operations.
The Company had no discontinued operations for the six months ended June 30, 2022 and therefore had no significant non-cash operating or investing activities for the properties classified within discontinued operations. There were no significant non-cash operating or investing activities for the properties classified within discontinued operations for the six months ended June 30, 2021.
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Note 5—Acquired Intangible Assets, Net
Acquired intangible assets, net, consisted of the following as of June 30, 2022 and December 31, 2021 (amounts in thousands, except weighted average remaining life amounts):
 June 30, 2022December 31, 2021
In-place leases, net of accumulated amortization of $74,588 and $66,579, respectively (with a weighted average remaining life of 9.1 years and 9.5 years, respectively)
$160,019 $168,012 
Above-market leases, net of accumulated amortization of $5,461 and $4,488, respectively (with a weighted average remaining life of 8.4 years and 8.8 years, respectively)
13,108 13,627 
$173,127 $181,639 
The aggregate weighted average remaining life of the acquired intangible assets was 9.1 years and 9.5 years as of June 30, 2022 and December 31, 2021, respectively.
Amortization of the acquired intangible assets was $5,676,000 and $5,499,000 for the three months ended June 30, 2022 and 2021, respectively, and $11,718,000 and $12,117,000 for the six months ended June 30, 2022 and 2021, respectively. Of the $