Annual report pursuant to Section 13 and 15(d)

Real Estate and Lease Intangibles (Tables)

v2.4.1.9
Real Estate and Lease Intangibles (Tables)
12 Months Ended
Dec. 31, 2014
Summary Information of Thirty-Two Farms

The following table provides certain summary information about our 32 farms as of December 31, 2014:

 

Property Name

   Location    Date
Acquired
   Number
of
Farms
     Total
Acres
     Farm
Acres
     Lease
Expiration
Date
   Net Cost
Basis(1)
     Encumbrances  

San Andreas

   Watsonville, CA    6/16/1997      1         307         238       12/31/2020    $ 4,826,248       $ 4,220,586   

West Gonzales

   Oxnard, CA    9/15/1998      1         653         502       6/30/2020      12,406,298         21,473,134   

West Beach

   Watsonville, CA    1/3/2011      3         196         195       12/31/2023      8,979,337         4,111,433   

Dalton Lane

   Watsonville, CA    7/7/2011      1         72         70       11/1/2015      2,700,026         1,362,231   

Keysville Road

   Plant City, FL    10/26/2011      2         59         50       7/1/2016      1,232,260         —     

Colding Loop

   Wimauma, FL    8/9/2012      1         219         181       6/14/2018      3,925,704         —     

Trapnell Road

   Plant City, FL    9/12/2012      3         124         110       6/30/2017      4,106,218         2,655,000   

38th Avenue

   Covert, MI    4/5/2013      1         119         89       4/4/2020      1,449,670         650,552   

Sequoia Street

   Brooks, OR    5/31/2013      1         218         206       5/31/2028      3,521,564         1,503,888   

Natividad Road

   Salinas, CA    10/21/2013      1         166         166       10/31/2024      7,398,003         3,395,874   

20th Avenue

   South Haven, MI    11/5/2013      3         151         94       11/4/2018      1,884,981         970,250   

Broadway Road

   Moorpark, CA    12/16/2013      1         60         60       12/15/2023      2,935,348         1,455,375   

Oregon Trail

   Echo, OR    12/27/2013      1         1,895         1,640       12/31/2023      13,993,009         6,791,748   

East Shelton

   Willcox, AZ    12/27/2013      1         1,761         1,320       2/29/2024      7,760,059         3,250,336   

Collins Road

   Clatskanie, OR    5/30/2014      2         200         157       9/30/2024      2,532,950         —     

Spring Valley

   Watsonville, CA    6/13/2014      1         145         110       9/30/2016      5,882,738         2,862,237   

McIntosh Road

   Dover, FL    6/20/2014      2         94         78       6/30/2017      2,553,874         1,599,600   

Naumann Road

   Oxnard, CA    7/23/2014      1         68         64       7/31/2017      6,859,860         3,342,510   

Sycamore Road

   Arvin, CA    7/25/2014      1         326         322       10/31/2024      5,939,523         2,813,724   

Wauchula Road

   Duette, FL    9/29/2014      1         808         590       9/30/2024      13,772,371         8,155,762   

Santa Clara Avenue

   Oxnard, CA    10/29/2014      2         333         331       7/31/2015      24,497,797         12,128,121   

Dufau Road

   Oxnard, CA    11/4/2014      1         65         64       11/3/2017      6,099,925         3,675,000   
        

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 
  32      8,039      6,637    $ 145,257,763    $ 86,417,361   
        

 

 

    

 

 

    

 

 

       

 

 

    

 

 

 

 

(1) Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets, excluding those allocated to above- and below-market lease values), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for depreciation and amortization accumulated through December 31, 2014.
Summary of Components of Investments in Real Estate

The following table sets forth the components of our investments in tangible real estate assets as of December 31, 2014 and 2013:

 

     2014      2013  

Real estate:

     

Land and land improvements

   $ 122,999,316       $ 63,944,307   

Irrigation system

     12,365,514         6,007,845   

Buildings and improvements

     11,447,308         7,487,051   

Horticulture

     1,559,340         1,038,850   
  

 

 

    

 

 

 

Real estate, gross

  148,371,478      78,478,053   

Accumulated depreciation

  (4,431,290   (3,166,870
  

 

 

    

 

 

 

Real estate, net

$ 143,940,188    $ 75,311,183   
  

 

 

    

 

 

 
Weighted Average Amortization Period for Intangible Assets Acquired and Liabilities Assumed

The following table shows the weighted-average amortization period, in years, for the intangible assets acquired and liabilities assumed in connection with the new properties acquired during the years ended December 31, 2014 and 2013:

 

Intangible Assets and Liabilities

   2014      2013  

In-place leases

     2.2         2.0   

Leasing commissions

     5.1         7.0   

Tenant relationships

     4.7         —     

Above-market lease values

     3.0         —     

Below-market lease values

     1.5         2.0   
  

 

 

    

 

 

 

All intangible assets and liabilities

  3.3      2.9   
  

 

 

    

 

 

 
Pro-Forma Condensed Consolidated Statements of Operations as Properties Acquired

The table below reflects pro-forma financials for all farms acquired, regardless of whether they were treated as asset acquisitions or business combinations.

 

     For the Years Ended December 31,  
     2014      2013  
     (Unaudited)      (Unaudited)  

Operating Data:

     

Total operating revenue

   $ 8,547,496       $ 9,113,902   

Total operating expenses

     (6,287,653      (5,183,279

Other expenses

     (2,902,815      (2,760,914
  

 

 

    

 

 

 

Net income before income taxes

  (642,972   1,169,708   

Provision for income taxes

  (26,502   (1,519,730
  

 

 

    

 

 

 

Net income

$ (669,474 $ (350,022
  

 

 

    

 

 

 

Share and Per-share Data:

Earnings per share of common stock - basic and diluted

$ (0.09 $ (0.05
  

 

 

    

 

 

 

Weighted average common shares outstanding - basic and diluted

  7,563,060      7,443,197   
  

 

 

    

 

 

Carrying Value of Lease Intangibles and Accumulated Amortization for Each Intangible Asset or Liability Class

The following table summarizes the carrying value of lease intangibles and the accumulated amortization for each intangible asset or liability class as of December 31, 2014 and 2013:

 

     2014      2013  
     Lease
Intangibles
     Accumulated
Amortization
     Lease
Intangibles
     Accumulated
Amortization
 

In-place leases

   $ 869,207       $ (263,428    $ 397,728       $ (241,697

Leasing costs

     357,210         (80,617      146,558         (34,727

Tenant relationships

     501,670         (66,467      93,187         (49,985
  

 

 

    

 

 

    

 

 

    

 

 

 
$ 1,728,087    $ (410,512 )  $ 637,473    $ (326,409 ) 
  

 

 

    

 

 

    

 

 

    

 

 

 
     Deferred
Rent Asset
(Liability)
     Accumulated
(Amortization)
Accretion
     Deferred
Rent
Liability
     Accumulated
Accretion
 

Above-market lease values

   $ 65,203       $ (9,027    $ —         $ —     

Below-market lease values

     (371,707      162,194         (260,356      114,469   
  

 

 

    

 

 

    

 

 

    

 

 

 
$ (306,504 )  $ 153,167    $ (260,356 )  $ 114,469   
  

 

 

    

 

 

    

 

 

    

 

 

 
Summary of Estimated Aggregate Amortization Expense and Estimated Net Impact on Rental Income

The estimated aggregate amortization expense to be recorded related to in-place leases, leasing costs and tenant relationships and the estimated net impact on rental income from the amortization of above- and below-market lease values for each of the five succeeding fiscal years and thereafter is as follows:

 

Period

   Estimated
Amortization
Expense
     Estimated Net
Increase (Decrease)
in Rental Revenue
 

For the fiscal years ending December 31:     2015

   $ 676,448       $ 171,636   

2016

     289,465         (5,284

2017

     161,781         (13,015

2018

     41,254         —     

2019

     38,542         —     

Thereafter

     110,085         —     
  

 

 

    

 

 

 
$ 1,317,575    $ 153,337   
  

 

 

    

 

 

 
Summarizes Lease Expirations by Year for Properties with Leases

The following table summarizes the lease expirations by year for our properties with leases in place as of December 31, 2014:

 

Year

   Number of
Expiring
Leases
     Expiring
Leased
Acreage
     % of
Total
Acreage
    Rental Revenue
for the Year Ended
December 31, 2014
     % of Total
Rental
Revenue
 

2015(1)

     4         405         5.0   $ 386,642         5.4

2016

     2         204         2.5     217,331         3.0

2017

     7         351         4.4     424,737         5.9

2018

     3         370         4.6     364,803         5.1

2019

     0         0         0.0     —           0.0

Thereafter

     12         6,709         83.5     5,776,805         80.6
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Totals

  28      8,039      100.0 %  $ 7,170,318      100.0 % 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)  Includes a surface area lease on a portion of one property leased to an oil company that is renewed on a year-to-year basis.
Future Operating Lease Payments from Tenants under Non-Cancelable Leases

Future operating lease payments from tenants under all non-cancelable leases, excluding tenant reimbursement of expenses, for each of the five succeeding fiscal years and thereafter as of December 31, 2014, are as follows:

 

Period

   Tenant Lease
Payments
 

For the fiscal years ending December 31:     2015

   $ 7,735,500   

2016

     8,205,815   

2017

     7,494,621   

2018

     6,882,291   

2019

     6,919,095   

Thereafter

     19,581,336   
  

 

 

 
$ 56,818,658   
  

 

 

 
Summary of Geographic Locations of Properties

The following table summarizes the geographic locations of our properties with leases in place as of December 31, 2014 and 2013:

 

     As of and For the Year Ended December 31, 2014     As of and For the Year Ended December 31, 2013  

State

   Number
of
Farms
     Total
Acres
     % of
Total
Acres
    Rental
Revenue
     % of Total
Rental
Revenue
    Number of
Farms
     Total
Acres
     % of
Total
Acres
    Rental
Revenue
     % of Total
Rental
Revenue
 

California

     14         2,391         29.7   $ 4,778,579         66.6     8         1,454         24.2   $ 3,362,020         83.5

Oregon

     4         2,313         28.8     1,080,105         15.1     2         2,113         35.2     123,138         3.0

Florida

     9         1,304         16.2     759,398         10.6     6         402         6.7     454,135         11.3

Arizona

     1         1,761         21.9     299,785         4.2     1         1,761         29.4     3,715         0.1

Michigan

     4         270         3.4     252,451         3.5     4         270         4.5     84,679         2.1
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
  32      8,039      100.0 %  $ 7,170,318      100.0 %    21      6,000      100.0 %  $ 4,027,687      100.0 % 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
Schedule of Purchase Agreements

As of December 31, 2014, we were entered into the following purchase agreements:

 

Date Entered Into

   Gross
Acres
     State      Primary
Crop(s)
     Purchase
Price
 

9/29/2014

     63         CA         Strawberries       $ 3,800,000 (1) 

12/17/2015

     331         CA         Strawberries         16,964,021 (2) 
  

 

 

          

 

 

 
  394    $ 20,764,021   
  

 

 

          

 

 

 

 

(1)  Agreement was terminated on January 20, 2015, and the related deposit of $100,000, which deposit is included in Other Assets on our Consolidated Balance Sheet as of December 31, 2014, was returned to us.
(2)  Acquisition was completed on January 5, 2015. See Note 10, “Subsequent Events,” for further discussion on the acquisition of this property.
2014 New Real Estate Activity [Member]  
Summary Information of Thirty-Two Farms

During the year ended December 31, 2014, we acquired 11 new farms in 8 separate transactions, which are summarized in the table below.

 

Property Name

Property
Location
Acquisition
Date
  Total
Acreage
  Number of
Farms
  Primary
Crop(s)
Lease
Term
Renewal Options Total
Purchase
Price
  Acquisition
Costs
  Annualized
Straight-
line Rent(1)
  Debt Issued /
Encumbrances
 

Collins Road

Clatskanie, OR   5/30/2014      200      2    Blueberries 10.3 years 3 (5 years each) $ 2,591,333    $ 60,869 (4)  $ 181,172    $ —     

Spring Valley

Watsonville, CA   6/13/2014      145      1    Strawberries, Misc.
Vegetables and Lilies
2.3 years None   5,900,000      49,582 (4)    270,901      2,862,237 (6) 

McIntosh Road

Dover, FL   6/20/2014      94      2    Strawberries 3.0 years 1 (3 years)
/None(2)
  2,666,000      60,939 (4)    133,154      1,599,600 (7) 

Naumann Road

Oxnard, CA   7/23/2014      68      1    Strawberries and
Raspberries
3.0 years 1 (3 years)   6,888,500      91,103 (4)    329,667      3,342,510 (6) 

Sycamore Road

Arvin, CA   7/25/2014      326      1    Misc. Vegetables and
Grain
1.3 years None(3)   5,800,000      44,434 (4)    184,304      2,813,724 (6) 

Wauchula Road

Duette, FL   9/29/2014      808      1    Strawberries, Misc.
Vegetables, and
Melons
10.0 years 2 (5 years each)   13,765,000      132,555 (5)    888,439      8,259,000 (7) 

Santa Clara Avenue

Oxnard, CA   10/29/2014      333      2    Strawberries and
Misc. Vegetables
0.8 years 1 (2 years)   24,592,000      100,603 (4)    1,231,422      12,128,121 (6) 

Dufau Road

Oxnard, CA   11/4/2014      65      1    Strawberries and
Misc. Vegetables
3.0 years 1 (3 years)   6,125,600      61,474 (4)    304,607      3,675,000 (7) 
     

 

 

   

 

 

         

 

 

   

 

 

   

 

 

   

 

 

 
  2,039      11    $ 68,328,433    $ 601,559    $ 3,523,666    $ 34,680,192   
     

 

 

   

 

 

         

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Annualized straight-line amount is based on the minimum rental payments required per the lease and includes the amortization of any above-market and below-market lease values recorded.
(2) This property has a separate tenant leasing each of the property’s two farms. One lease provides for one 3-year renewal option, while the other does not include a renewal option.
(3) Upon acquisition of this property, we assumed the in-place lease, which expires October 31, 2015. In addition, we executed a 9-year, follow-on lease with a new tenant that commences November 1, 2015. Under the terms of the follow-on lease, the tenant has one 3-year renewal option, and annualized, straight-line rents will be $311,760.
(4) Acquisition accounted for as a business combination under ASC 805. As such, all acquisition-related costs were expensed as incurred, other than direct leasing costs, which were capitalized. In aggregate, we incurred $21,409 of direct leasing costs in connection with these acquisitions.
(5) Acquisition accounted for as an asset acquisition under ASC 360. As such, all acquisition-related costs were capitalized and allocated among the identifiable assets acquired.
(6) Acquisition funded through a draw on our New MetLife Credit Facility. Amount represents property’s proportionate share of the total borrowings outstanding under the New MetLife Credit Facility as of December 31, 2014, in relation to all properties pledged as collateral under the facility.
(7) Represents new debt issued under various facilities; see Note 5, “Borrowings.”
Fair Value of Acquired Assets and Liabilities Assumed Related to Properties Acquired

We determined the fair value of acquired assets and liabilities assumed related to the properties acquired during the year ended December 31, 2014, to be as follows:

 

Property Name

  Land and
Land
Improvements
    Buildings and
Improvements
    Irrigation
System
    Horticulture(1)     In-place
Leases
    Leasing
Costs(2)
    Customer
Relationships
    Above-
(Below)-
Market
Leases
    Total
Acquisition
Cost
 

Collins Road

  $ 1,252,388      $ 682,385      $ —        $ 520,993      $ 45,086      $ 71,085      $ 24,796      $ —        $ 2,596,733   

Spring Valley

    5,576,138        5,781        200,855        —          83,487        17,998        66,217        (49,976     5,900,500   

McIntosh Road

    1,970,074        33,592        537,254        —          34,674        18,041        27,966        45,674        2,667,275   

Naumann Road

    6,219,293        433,087        71,586        —          75,520        41,012        54,786        —          6,895,284   

Sycamore Road

    5,840,750        —          67,000        —          48,670        7,364        —          (160,184     5,803,600   

Wauchula Road

    8,466,185        1,904,941        3,521,229        —          —          5,200        —          —          13,897,555   

Santa Clara Avenue

    23,672,902        163,140        187,314        —          310,119        30,353        229,372        —          24,593,200   

Dufau Road

    5,859,721        3,021        88,827        —          71,654        32,778        52,720        19,529        6,128,250   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
$ 58,857,451    $ 3,225,947    $ 4,674,065    $ 520,993    $ 669,210    $ 223,831    $ 455,857    $ (144,957 $ 68,482,397   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)  Horticulture acquired on Collins Road consists of various types of blueberry bushes.
(2)  Leasing commissions represent the allocable portion of the purchase price, as well as direct costs that were incurred related to reviewing and assigning leases we assumed upon acquisition. Direct leasing costs incurred in connection with properties acquired during the year ended December 31, 2014, that were accounted for as business combinations under ASC 805 totaled $21,409.
Summary of Total Operating Revenues and Earnings Recognized on Properties Acquired

Below is a summary of the total operating revenues and earnings recognized on the properties acquired during the year December 31, 2014:

 

Property Name

   Acquisition
Date
   Operating
Revenues(1)
     Earnings(2)  

Collins Road

   5/30/2014    $ 106,658       $ 33,303   

Spring Valley

   6/13/2014      148,996         81,073   

McIntosh Road

   6/20/2014      58,021         (22,902 )(3) 

Naumann Road

   7/23/2014      145,337         104,726   

Sycamore Road

   7/25/2014      80,328         39,574   

Wauchula Road

   9/29/2014      226,978         101,794   

Santa Clara Avenue

   10/29/2014      212,078         73,833   

Dufau Road

   11/4/2014      48,229         32,807   
     

 

 

    

 

 

 
$ 1,026,625    $ 444,208   
     

 

 

    

 

 

 

 

(1)  Includes the amortization of any above—and below—market lease values recorded.
(2)  Earnings are calculated as net income less interest expense (if debt was issued to acquire the property), income taxes and any acquisition—related costs that are required to be expensed if the acquisition is treated as a business combination under ASC 805.
(3) Includes $43,328 of lease intangibles that were written off during the three months ended September 30, 2014, related to the termination of a lease in September 2014 that we had assumed upon acquisition. The property was immediately re—leased to a new tenant at similar rental rates.
2013 New Real Estate Activity [Member]  
Fair Value of Acquired Assets and Liabilities Assumed Related to Properties Acquired

We determined the fair value of acquired assets and liabilities assumed related to the properties acquired during the year ended December 31, 2013, to be as follows:

 

Property Name

   Land and
Land
Improvements
     Buildings and
Irrigation
Improvements
     System      Horticulture(1)      In-place
Leasing
     Leases
Costs(2)
     Below-
Market
Leases
    Total
Acquisition
Cost
 

38th Avenue

   $ 646,522       $ 42,660       $ 239,768$         446,408       $ —         $ 3,842       $ —        $ 1,379,200   

Sequoia Street

     2,494,911         279,496         424,268         —           —           9,535         —          3,208,210   

Natividad Road

     7,186,774         19,199         144,915         —           110,753         29,941         (161,547     7,330,035   

20th Avenue

     805,677         281,160         441,415         488,604         —           2,623         —          2,019,479   

Broadway Road

     2,851,353         50,114         22,727         103,334         —           —           —          3,027,528   

Oregon Trail

     12,941,092         —           1,118,640         —           —           8,726         —          14,068,458   

East Shelton

     6,175,702         131,434         441,573         —           —           1,982         —          6,750,691   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
$ 33,102,031    $ 804,063    $ 2,833,306    $ 1,038,346    $ 110,753    $ 56,649    $ (161,547 $ 37,783,601   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

(1)  Horticulture acquired on 38th Avenue and 20th Avenue consists of various types of high-bush variety blueberry bushes. Horticulture acquired on Broadway Road consits of an orchard of lemon trees.
(2) Leasing commissions represent the allocable portion of the purchase price, as well as direct costs that were incurred related to reviewing and assigning leases we assumed upon acquisition. Direct leasing costs incurred in connection with properties acquired during the year ended December 31, 2014, that were accounted for as business combinations under ASC 805 totaled $21,408.
Summary of Total Operating Revenues and Earnings Recognized on Properties Acquired

Below is a summary of the total operating revenues and earnings recognized on the properties acquired during the year December 31, 2013:

 

Property Name

   Acquisition
Date
   Revenues
Operating(1)
     Earnings(2)  

38th Avenue

   4/5/2013    $ 64,494       $ 35,996   

Sequoia Street

   5/31/2013      112,944         83,262   

Natividad Road

   10/21/2013      86,510         63,133   

20th Avenue

   11/5/2013      20,184         6,919   

Broadway Road

   12/16/2013      7,396         3,713   

Oregon Trail

   12/27/2013      10,195         10,154   

East Shelton

   12/27/2013      3,715         3,283   
     

 

 

    

 

 

 
$ 305,438    $ 206,460   
     

 

 

    

 

 

 

 

(1) Includes the amortization of any below-market lease values recorded.
(2) Earnings are calculated as net income less interest expense (if debt was issued to acquire the property), income taxes and any acquisition-related costs that are required to be expensed if the acquisition is treated as a business combination under ASC 805.
Summarized Information of Acquisition of Properties

During the year ended December 31, 2013, we acquired nine new farms in seven separate transactions, which are summarized in the table below.

 

Property Name

Property Location Acquisition
Date
  Total
Acreage
  Number of
Farms
  Primary
Crop(s)
Lease
Term
Renewal
Options
Total
Purchase
Price
  Acquisition
Costs
  Annualized
Straight-
line Rent(1)
 

38th Avenue

  Covert, MI     4/5/2013        119        1      Blueberries   7 years   1 (7 years)   $ 1,341,000      $ 38,200 (4)    $ 87,286   

Sequoia Street

  Brooks, OR     5/31/2013        218        1      Blueberries   15 years   3 (5 years
each)
    3,100,000        108,211 (4)      193,617   

Natividad Road

  Salinas, CA     10/21/2013        166        1      Strawberries
& Raspberries
 
  2 years(3)   None(3)     7,325,120        47,850 (5)      439,575   

20th Avenue

  South Haven, MI     11/5/2013        151        3      Blueberries   5 years   1 (5 years)     1,985,000        34,479 (4)      129,755   

Broadway Road

  Moorpark, CA     12/16/2013        60        1      Lemons(2)   10 years   1 (10 years)     3,000,000        27,528 (4)      171,958   

Oregon Trail

  Echo, OR     12/27/2013        1,895        1      Corn, Onions
& Potatoes
  10 years   3 (5 years
each)
    13,855,000        213,458 (4)      758,480   

East Shelton

  Willcox, AZ     12/27/2013        1,761        1      Corn & Dry
edible beans
  10 years   None     6,700,000        50,691 (4)      290,284   
     

 

 

   

 

 

         

 

 

   

 

 

   

 

 

 
        4,370        9            $ 37,306,120      $ 520,417      $ 2,070,955   
     

 

 

   

 

 

         

 

 

   

 

 

   

 

 

 

 

(1) Annualized straight-line amount is based on the minimum rental payments required per the lease and includes the amortization of any above-market and below-market lease values recorded.
(2) Beginning in 2015, this property will be farmed for blueberries and avocados.
(3) Upon acquisition of the property, we assumed a lease with two years remaining on it. T his lease originally provided for one, three-year extension option; however, the right to this option was waived by the tenant. In connection with assuming this lease, we recorded a below-market lease liability of $161,547. In addition, the Company executed a nine-year, follow-on lease with a separate tenant to commence at the expiration of the assumed lease. T he follow-on lease includes one, five-year renewal option and provides for prescribed rent escalations over the term of the lease, with annualized, straight-line rents of $413,476.
(4) Acquisition accounted for as an asset acquisition under ASC 360. As such, all acquisition-related costs were capitalized and allocated among the identifiable assets acquired.
(5) Acquisition accounted for as a business combination under ASC 805. As such, all acquisition-related costs were expensed as incurred, other than direct leasing costs, which were capitalized. We incurred $4,915 of direct leasing costs in connection with this acquisition.