Easterly Government Properties Inc
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
DEA$22.48-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
0000950170-24-050565
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000950170-24-088240
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 156 previous paragraphs and 195 current paragraphs.
112 unchanged; 39 reworded; 33 added; 5 removed; 0 previous and 11 current paragraphs rearranged.
Tables are not compared: 11 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
On May 7, 2024, we acquired a 27,840 leased square foot Homeland Security Investigations (“HSI”) facility in Orlando, Florida with a 15-year lease that does not expire until March 2036. HSI is the principal investigation arm within the Department of Homeland Security.
Current report
On May 9, 2024, we acquired a 49,420 leased square foot ICE facility in Orlando, Florida with a 20-year lease that does not expire until August 2040.
Current report
Development
Current report
Private tenants occupy 48,523 leased square feet.
Current report
C=Courthouse
Current report
Total revenues increased $4.8 million to $76.2 million for the three months ended June 30, 2024 compared to $71.4 million for the three months ended June 30, 2023.
Current report
Total expenses increased $2.2 million to $57.6 million for the three months ended June 30, 2024 compared to $55.3 million for the three months ended June 30, 2023.
Current report
Revenues
Current report
Total revenues increased $6.4 million to $149.0 million for the six months ended June 30, 2024 compared to $142.6 million for the six months ended June 30, 2023.
Current report
The $7.0 million increase in Rental income is primarily attributable to the six operating properties acquired since June 30, 2023.
Current report
Expenses
Current report
The $0.8 million decrease in Property operating expenses is primarily attributable to a decrease in reimbursable projects and utility costs across the portfolio partially offset by an increase from the six operating properties acquired since June 30, 2023.
Current report
The $2.2 million increase in Depreciation and amortization is also primarily attributable to the six operating properties acquired since June 30, 2023.
Current report
Interest expense, net
Current report
existing cash balances;
Current report
commitments to fund advancements through loan receivables;
Current report
The following table sets forth certain information with respect to issuances under the 2019 ATM Program during the six months ended June 30, 2024 (amounts in thousands, except share amounts):
Current report
(1) Shares issued by us, which were all issued in settlement of forward sale transactions. As of June 30, 2024, we had settled all of our outstanding forward sale transactions under the 2019 ATM Program. We accounted for the forward sale transactions as equity.
Current report
Subsequent to June 30, 2024, we entered into forward sale transactions under the 2019 ATM Program for the sale of an additional 400,000 shares of our common stock that have not yet been settled. Subject to our right to elect net share settlement, we expect to physically settle the forward sale transactions no later than July 11, 2025. Assuming the forward sale transactions are physically settled in full utilizing a net weighted average initial forward sales price of $13.27 per share, we expect to receive net proceeds of approximately $5.3 million, after deducting offering costs, subject to adjustments in accordance with the applicable forward sale transaction.
Current report
Our 2024 revolving credit facility is subject to one interest rate swap with an effective date of June 23, 2023 and a notional value of $100.0 million, of which $25.0 million is associated with our 2024 revolving credit facility, to effectively fix the interest rate at 5.46% annually. The spread over the secured overnight financing rate (“SOFR”) is based on our consolidated leverage ratio, as defined in our 2024 revolving credit facility agreement. Additionally at June 30, 2024, $34.0 million of amounts outstanding under our 2024 revolving credit facility had a floating rate of 5.33% under USD Term SOFR and the remaining $13.5 million outstanding under our 2024 revolving credit facility had a floating rate of 5.31% under USD SOFR with a five day lookback.
Current report
2024 Senior Note Agreement
Current report
On May 29, 2024, we entered into a master note purchase agreement pursuant to which the Operating Partnership will issue and sell an aggregate of up to $200 million of fixed rate, senior unsecured notes (“Senior Notes”) consisting of (i) 6.56% Series A Senior Notes due May 29, 2033 (“Series A Senior Notes”), in an aggregate principal amount of $150.0 million, and (ii) 6.56% Series B Senior Notes due August 14, 2033 (“Series B Senior Notes”), in an aggregate principal amount of $50.0 million. The Series A Senior Notes were issued on May 29, 2024 and the Series B Senior Notes are expected to be issued on or around August 14, 2024, subject to customary closing conditions. We, together with various subsidiaries of the Operating Partnership, have guaranteed the Series A Senior Notes (and will guarantee the Series B Senior Notes, once issued).
Current report
2024 Revolving Credit Facility
Current report
On June 3, 2024, we entered into a credit agreement (the “2024 Credit Agreement”) that provides for a $400.0 million senior unsecured revolving credit facility which includes an accordion feature that provides us with additional capacity of up to $300.0 million, subject to syndication of the increase and the satisfaction of customary terms and conditions. The 2024 revolving credit facility has an initial four-year term and will mature in June 2028, with two six-month as-of-right extension options, subject to certain conditions and the payment of an extension fee.
Current report
Borrowings under the 2024 revolving credit facility will, at the Operating Partnership's option, bear interest at floating rates equal to either (i) a fluctuating rate equal to the sum of (a) the highest of (x) Citibank, N.A.'s base rate, (y) the federal funds effective rate plus 0.50% and (z) the one-month adjusted term SOFR plus 1.00%, plus, in each case, (b) a margin ranging from 0.20% to 0.80% based on our leverage ratio, (ii) the daily simple SOFR plus a credit spread adjustment of 0.10% (the “Adjusted DSS”), or (iii) the term SOFR, plus a credit spread adjustment of 0.10% (the “Term SOFR”), plus, in the case of borrowings bearing interest at Adjusted DSS or Term SOFR, a margin ranging from 1.20% to 1.80% based on our leverage ratio.
Current report
2021 Revolving Credit Facility
Current report
We are also party to the second amended and restated credit agreement, dated July 23, 2021, as amended by the first amendment, dated as of July 22, 2022, the second amendment, dated as of November 23, 2022, and the third amendment, dated as of May 30, 2023 (as amended, restated, or otherwise modified from time to time, the “2021 Credit Facility”), which provides for (i) a $450.0 million senior unsecured revolving credit facility (the “2021 revolving credit facility”) and (ii) our 2018 term loan facility.
Current report
Effective on June 3, 2024 upon the entry into the 2024 Credit Agreement and the prepayment of all amounts outstanding under the 2021 revolving credit facility, the component of the 2021 Credit Facility providing for the 2021 revolving credit facility, including all unused commitments, was terminated. Other than the foregoing, the terms of the 2021 Credit Facility remain unchanged and our 2018 term loan facility remains outstanding. We recognized an aggregate $0.3 million loss on debt extinguishment during the three months ended June 30, 2024 which is included in interest expense, net on our Consolidated Statement of Operations.
Current report
Term Loan Facilities
Current report
On June 3, 2024, we repaid $25.0 million of amounts outstanding under our 2018 term loan facility using available cash derived from the issuance of Series A Senior Notes.
Current report
On July 8, 2024, we used $0.5 million of available cash to pay down a portion of our 2018 term loan facility.
Current report
On July 15, 2024, we amended the credit agreements governing our 2016 and 2018 term loan facilities to conform certain definitions related to leverage covenants to the provisions of the 2024 Credit Agreement.
Current report
During the six months ended June 30, 2024, we increased our commitment to fund advancements through a loan receivable to $13.9 million. As of June 30, 2024, $5.5 million has been funded. We expect to fund the remaining commitment over the next year dependent on the borrower's election to use the commitments.
Removed paragraphs (5)
Previous report
Total expenses decreased $0.7 million to $55.5 million for the three months ended March 31, 2024 compared to $56.2 million for the three months ended March 31, 2023.
Previous report
cash and cash equivalents;
Previous report
As of March 31, 2024, we had forward sales transactions outstanding under the 2019 ATM Program for the sale of 589,647 shares of our common stock that had not yet been settled.
Previous report
On April 10, 2024, we settled the 589,647 shares under our 2019 ATM Program and received $7.9 million of net proceeds. We accounted for the forward sale transactions as equity.
Previous report
On January 2, 2024, the margin spreads under the second amended senior unsecured credit agreement that governs our revolving credit facility were reduced by 1 basis point as a result of achieving our sustainability metric percentage.
Reworded paragraphs (39)
Previous wording
We focus primarily on acquiring, developing and managing U.S. Government-leased properties that are essential to supporting the mission of the tenant agency and strive to be a partner of choice for the U.S. Government, working closely with the tenant agency to meet its needs and objectives. We may also consider other potential opportunities to add properties to our portfolio, including acquiring properties leased to state and local governments with strong creditworthiness and other opportunities that directly or indirectly support the mission of select government agencies. As of March 31, 2024, we wholly owned 81 operating properties and nine operating properties through an unconsolidated joint venture (the “JV”) in the United States, encompassing approximately 8.9 million leased square feet (8.4 million pro rata), including 88 operating properties that were leased primarily to U.S. Government tenant agencies, one operating property entirely leased to tenant agencies of a U.S. state government and one operating property that was entirely leased to a private tenant. As of March 31, 2024, our operating properties were 97% leased. For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned one property under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
Current wording
We focus primarily on acquiring, developing and managing U.S. Government-leased properties that are essential to supporting the mission of the tenant agency and strive to be a partner of choice for the U.S. Government, working closely with the tenant agency to meet its needs and objectives. We may also consider other potential opportunities to add properties to our portfolio, including acquiring properties leased to state and local governments with strong creditworthiness and other opportunities that directly or indirectly support the mission of select government agencies. As of June 30, 2024, we wholly owned 84 operating properties and nine operating properties through an unconsolidated joint venture (the “JV”) in the United States, encompassing approximately 9.1 million leased square feet (8.6 million pro rata), including 91 operating properties that were leased primarily to U.S. Government tenant agencies, one operating property entirely leased to tenant agencies of a U.S. state government and one operating property that was entirely leased to a private tenant. As of June 30, 2024, our operating properties were 97% leased. For purposes of calculating percentage leased, we exclude from the denominator total square feet that was unleased and to which we attributed no value at the time of acquisition. In addition, we wholly owned two properties under development that we expect will encompass approximately 0.2 million leased square feet upon completion.
Previous wording
The operating partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of the operating partnership and owned approximately 95.0% of the aggregate limited partnership interests in the operating partnership, which we refer to herein as common units, as of March 31, 2024. We have elected to be taxed as a REIT and believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015.
Current wording
The Operating Partnership holds substantially all of our assets and conducts substantially all of our business. We are the sole general partner of the Operating Partnership and owned approximately 95.1% of the aggregate limited partnership interests in the Operating Partnership, which we refer to herein as common units, as of June 30, 2024. We have elected to be taxed as a REIT and believe that we have operated and have been organized in conformity with the requirements for qualification and taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2015.
Previous wording
As of March 31, 2024, our operating properties were 97% leased with a weighted average annualized lease income per leased square foot of $35.99 ($35.66 pro rata) and a weighted average age of approximately 14.8 years based on the date the property was built or renovated-to-suit, where applicable. We calculate annualized lease income as annualized contractual base rent for the last month in a specified period, plus the annualized straight line rent adjustments for the last month in such period and the annualized net expense reimbursements earned by us for the last month in such period.
Current wording
As of June 30, 2024, our operating properties were 97% leased with a weighted average annualized lease income per leased square foot of $36.00 ($35.67 pro rata) and a weighted average age of approximately 14.8 years based on the date the property was built or renovated-to-suit, where applicable. We calculate annualized lease income as annualized contractual base rent for the last month in a specified period, plus the annualized straight line rent adjustments for the last month in such period and the annualized net expense reimbursements earned by us for the last month in such period.
Previous wording
OC=Outpatient Clinic; O=Office; C=Courthouse; L=Laboratory; W=Warehouse; D=Distribution.
Current wording
OC=Outpatient Clinic; SF=Specialized Facility; O=Office; C=Courthouse; L=Laboratory; W=Warehouse.
Previous wording
Certain of our leases are currently in the “soft-term” period of the lease, meaning that the U.S. Government tenant agency has the right to terminate the lease prior to its stated lease end date. We believe that, from the U.S. Government’s perspective, leases with such provisions are helpful for budgetary purposes. While some of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the weighted average age of these properties based on the date the property was built or renovated-to-suit, where applicable (approximately 19.4 years as of March 31, 2024), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties.
Current wording
Certain of our leases are currently in the “soft-term” period of the lease, meaning that the U.S. Government tenant agency has the right to terminate the lease prior to its stated lease end date. We believe that, from the U.S. Government’s perspective, leases with such provisions are helpful for budgetary purposes. While some of our leases are contractually subject to early termination, we do not believe that our tenant agencies are likely to terminate these leases early given the build-to-suit features at the properties subject to the leases, the weighted average age of these properties based on the date the property was built or renovated-to-suit, where applicable (approximately 19.1 years as of June 30, 2024), the mission-critical focus of the properties subject to the leases and the current level of operations at such properties.
Previous wording
The year of lease expiration is pursuant to current contract terms. Some tenants have the right to vacate their space during a specified period, or “soft term,” before the stated terms of their leases expire. As of March 31, 2024, 11 tenants occupying approximately 7.1% of our leased square feet and contributing approximately 6.9% of our annualized lease income have exercisable rights to terminate their lease before the stated term of their respective lease expires.
Current wording
The year of lease expiration is pursuant to current contract terms. Some tenants have the right to vacate their space during a specified period, or “soft term,” before the stated terms of their leases expire. As of June 30, 2024, 11 tenants occupying approximately 7.0% of our leased square feet and contributing approximately 6.8% of our annualized lease income have exercisable rights to terminate their lease before the stated term of their respective lease expires.
Previous wording
The $2.6 million increase in Rental income is primarily attributable to the three operating properties acquired since March 31, 2023.
Current wording
The $4.4 million increase in Rental income is primarily attributable to the six operating properties acquired since June 30, 2023.
Previous wording
The less than $0.1 million increase in Other income is primarily attributable to an increase in interest income offset by a decrease in project overhead income from our tenant reimbursable projects.
Current wording
The $0.1 million increase in Other income is primarily attributable to an increase in interest income.
Previous wording
The $1.3 million decrease in Property operating expenses is primarily attributable to a decrease in tenant reimbursable projects.
Current wording
The $0.5 million increase in Property operating expenses is primarily attributable to the six operating properties acquired since June 30, 2023.
Previous wording
The $0.7 million increase in Depreciation and amortization is primarily attributable to the three operating properties acquired since March 31, 2023.
Current wording
The $1.5 million increase in Depreciation and amortization is primarily attributable to the six operating properties acquired since June 30, 2023.
Previous wording
The less than $0.1 million increase in Income from unconsolidated real estate venture is primarily attributable to our pro rata share of operations from the one operating property acquired by the JV since March 31, 2023.
Current wording
The less than $0.1 million decrease in Income from unconsolidated real estate venture is primarily attributable to higher operating expenses partially offset by operations from the one operating property acquired by the JV since June 30, 2023.
Previous wording
The $1.8 million increase in Interest expense, net is primarily attributable to higher weighted average borrowings and interest rates on our swapped term loans.
Current wording
The $3.5 million increase in Interest expense, net is primarily attributable to higher weighted average borrowings and interest rates on our swapped term loans.
Previous wording
The $1.1 million decrease in Tenant reimbursements is primarily attributable to a decrease in tenant project reimbursements.
Current wording
The $0.7 million decrease in Tenant reimbursements is primarily attributable to a decrease in tenant project reimbursements.
Previous wording
Total revenues increased $1.6 million to $72.8 million for the three months ended March 31, 2024 compared to $71.2 million for the three months ended March 31, 2023.
Current wording
Total expenses increased $1.6 million to $113.1 million for the six months ended June 30, 2024 compared to $111.5 million for the six months ended June 30, 2023.
Previous wording
The $0.8 million increase in Real estate taxes is primarily attributable to the three operating properties acquired since March 31, 2023 as well as an increase in real estate taxes across our portfolio.
Current wording
The $1.0 million increase in Real estate taxes is primarily attributable to the six operating properties acquired since June 30, 2023 as well as an increase in real estate taxes across our portfolio.
Previous wording
The $0.8 million decrease in Corporate general and administrative is primarily due to a decrease in employee services and amortization on stock-based compensation.
Current wording
The $0.7 million decrease in Corporate general and administrative is primarily due to a decrease in employee costs.
Previous wording
We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months for all anticipated uses, including all scheduled principal and interest payments on our outstanding indebtedness, current and anticipated tenant improvements, development activities at FDA – Atlanta, planned and possible acquisitions of properties, including the one remaining property in the portfolio of ten properties anticipated to be acquired through the JV (the “VA Portfolio”), stockholder distributions to maintain our qualification as a REIT, potential repurchases of common stock under our share repurchase program and other capital obligations associated with conducting our business. At March 31, 2024, we had approximately $56.1 million available in cash and cash equivalents and there was approximately $305.4 million available under our revolving credit facility.
Current wording
We anticipate that our cash flows from the sources listed below will provide adequate capital for the next 12 months for all anticipated uses, including all scheduled principal and interest payments on our outstanding indebtedness, current and anticipated tenant improvements, development activities at FDA – Atlanta and JUD – Flagstaff, planned and possible acquisitions of properties, including the one remaining property in the portfolio of ten properties anticipated to be acquired through the JV (the “VA Portfolio”), stockholder distributions to maintain our qualification as a REIT, potential repurchases of common stock under our share repurchase program and other capital obligations associated with conducting our business. At June 30, 2024, we had approximately $14.8 million available in cash and cash equivalents, $12.4 million of restricted cash and there was approximately $327.4 million available under our 2024 revolving credit facility.
Previous wording
available borrowings under our revolving credit facility;
Current wording
available borrowings under our 2024 revolving credit facility;
Previous wording
development and redevelopment activities, including major redevelopment, renovation or expansion programs at FDA - Atlanta and other individual properties;
Current wording
development and redevelopment activities, including major redevelopment, renovation or expansion programs at FDA - Atlanta and JUD - Flagstaff and other individual properties;
Previous wording
No sales of shares of our common stock were made under the 2021 ATM Program during the three months ended March 31, 2024.
Current wording
No sales of shares of our common stock were made under the 2021 ATM Program during the six months ended June 30, 2024.
Previous wording
No repurchases of shares of our common stock were made under the share repurchase program during the three months ended March 31, 2024.
Current wording
No repurchases of shares of our common stock were made under the share repurchase program during the six months ended June 30, 2024.
Previous wording
At March 31, 2024, the USD SOFR with a five day lookback (“S”) was 5.31%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums. The spread over the applicable rate for each of our $450.0 million senior unsecured revolving credit facility (our “revolving credit facility”), our $200.0 million senior unsecured term loan facility (as amended, our “2018 term loan facility”) and our $100.0 million senior unsecured term loan facility (our “2016 term loan facility”) is based on our consolidated leverage ratio, as set forth in the respective loan agreements.
Current wording
The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums.
Previous wording
Our revolving credit facility had available capacity of $305.4 million at March 31, 2024 with an accordion feature that permits us to request additional lender commitments for up to $250.0 million of additional capacity, subject to the satisfaction of customary terms and conditions.
Current wording
Our $400.0 million senior unsecured revolving credit facility (the “2024 revolving credit facility”) had available capacity of $327.4 million at June 30, 2024 which includes an accordion feature that provides us with additional capacity of up to $300.0 million, subject to syndication of the increase and the satisfaction of customary terms and conditions.
Previous wording
Our revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee.
Current wording
Our 2024 revolving credit facility has two six-month as-of-right extension options subject to certain conditions and the payment of an extension fee.
Previous wording
Our 2016 term loan facility is subject to one interest rate swap with an effective date of September 29, 2023 and a notional value of $100.0 million, which effectively fixes the interest rate at 5.05% annually, based on our consolidated leverage ratio, as defined in our 2016 term loan facility agreement.
Current wording
Our 2016 term loan facility (our “2016 term loan facility”) is subject to one interest rate swap with an effective date of June 23, 2023 and a notional value of $100.0 million, which effectively fixes the interest rate at 5.63% annually. The spread over SOFR is based on our consolidated leverage ratio, as defined in our 2016 term loan facility agreement.
Previous wording
Our 2018 term loan facility is subject to two interest rate swaps with an effective date of June 23, 2023 and an aggregate notional value of $200.0 million, which effectively fixes the interest rate at 5.38% annually, based on our consolidated leverage ratio, as defined in our 2018 term loan facility agreement.
Current wording
Our 2018 term loan facility (as amended, our “2018 term loan facility”) is subject to two interest rate swaps with an effective date of June 23 and September 29, 2023 and an aggregate notional value of $200.0 million, of which $175.0 million is associated with our 2018 term loan, to effectively fix the interest rate at 5.23% annually. The spread over SOFR is based on our consolidated leverage ratio, as defined in our 2018 term loan facility agreement.
Previous wording
Effective interest rates are as follows: VA – Golden 5.03%, USFS II – Albuquerque 3.92%, ICE – Charleston 3.93%, VA – Loma Linda 3.78%, CBP – Savannah 4.12%, USCIS – Kansas City 2.05%.
Current wording
Effective interest rates are as follows: USFS II – Albuquerque 3.92%, ICE – Charleston 3.93%, VA – Loma Linda 3.78%, CBP – Savannah 4.12%, USCIS – Kansas City 2.05%.
Previous wording
On April 1, 2024, we used $8.4 million of available cash to extinguish the mortgage obligation on VA – Golden.
Current wording
On April 1, 2024, we used $8.4 million of available cash to extinguish the mortgage note obligation on VA – Golden.
Previous wording
Our revolving credit facility, term loan facilities, notes payable, and mortgage notes payable are subject to ongoing compliance with a number of financial and other covenants. As of March 31, 2024, we were in compliance with all applicable financial covenants.
Current wording
Our 2024 revolving credit facility, term loan facilities, notes payable, and mortgage notes payable are subject to ongoing compliance with a number of financial and other covenants. As of June 30, 2024, we were in compliance with all applicable financial covenants.
Previous wording
Our 2016 term loan facility and 2018 term loan facility are swapped to be fixed and as such are included as fixed rate debt in the table above.
Current wording
Our 2016 term loan facility, 2018 term loan facility and $25.0 million of our 2024 revolving credit facility are swapped to be fixed and as such are included as fixed rate debt in the table above.
Previous wording
During the three months ended March 31, 2024, there were no material changes to the cash commitment information presented in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Other than as described above, during the six months ended June 30, 2024, there were no material changes to the cash commitment information presented in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
As of March 31, 2024, we had invested $282.9 million in the JV. As of March 31, 2024, we had committed capital, net of return of over committed capital, to the JV totaling $292.8 million and had a remaining capital commitment of $46.6 million. None of the properties owned by the JV are encumbered by mortgage indebtedness.
Current wording
As of June 30, 2024, we had invested $280.1 million in the JV. As of June 30, 2024, we had committed capital, net of return of over committed capital, to the JV totaling $292.8 million and had a remaining capital commitment of $46.6 million. None of the properties owned by the JV are encumbered by mortgage indebtedness.
Previous wording
The following table sets forth a summary of cash flows for the three months ended March 31, 2024 and 2023 (amounts in thousands):
Current wording
The following table sets forth a summary of cash flows for the six months ended June 30, 2024 and 2023 (amounts in thousands):
Previous wording
We generated $23.9 million and $21.6 million of cash from operating activities during the three months ended March 31, 2024 and 2023, respectively. Net cash provided by operating activities for the three months ended March 31, 2024 includes $26.0 million in net cash from rental activities net of expenses, $3.1 million related to distributions from investment in unconsolidated real estate venture, offset by $5.2 million related to the change in tenant accounts receivable, prepaid expenses and other assets, deferred revenue associated with operating leases, principal payments on operating lease obligations, and accounts payable, accrued expenses and other liabilities. Net cash provided by operating activities for the three months ended March 31, 2023 includes $25.6 million in net cash from rental activities net of expenses, $2.2 million related to distributions from investment in unconsolidated real estate venture, offset by $6.1 million related to the change in tenant accounts receivable, prepaid expenses and other assets, deferred revenue associated with operating leases, principal payments on operating lease obligations, and accounts payable, accrued expenses and other liabilities.
Current wording
We generated $80.9 million and $59.1 million of cash from operating activities during the six months ended June 30, 2024 and 2023, respectively. Net cash provided by operating activities for the six months ended June 30, 2024 includes $52.7 million in net cash from rental activities net of expenses, $21.0 million related to the change in tenant accounts receivable, prepaid expenses and other assets, deferred revenue associated with operating leases, principal payments on operating lease obligations, and accounts payable, accrued expenses and other liabilities and $7.3 million related to distributions from investment in unconsolidated real estate venture. Net cash provided by operating activities for the six months ended June 30, 2023 includes $51.1 million in net cash from rental activities net of expenses, $5.9 million related to distributions from investment in unconsolidated real estate venture and $2.1 million related to the change in tenant accounts receivable, prepaid expenses and other assets, deferred revenue associated with operating leases, principal payments on operating lease obligations, and accounts payable, accrued expenses and other liabilities.
Previous wording
We used $24.9 million and $10.6 million in cash for investing activities during the three months ended March 31, 2024 and 2023, respectively. Net cash used in investing activities for the three months ended March 31, 2024 includes $12.9 million in additions to development properties, $7.9 million in additions to operating properties, $3.4 million in investment in loan receivable and $0.6 million in real estate acquisitions and deposits. Net cash used in investing activities for the three months ended March 31, 2023 includes $7.8 million in additions to operating properties and $2.9 million in additions to development properties, offset by $0.1 million in real estate acquisitions and deposits.
Current wording
We used $126.3 million and $21.0 million in cash for investing activities during the six months ended June 30, 2024 and 2023, respectively. Net cash used in investing activities for the six months ended June 30, 2024 includes $58.2 million in real estate acquisitions and deposits, $43.0 million in additions to development properties, $19.6 million in additions to operating properties and $5.5 million in investment in loan receivable. Net cash used in investing activities for the six months ended June 30, 2023 includes
Previous wording
We generated $35.2 million and used $7.9 million in cash from financing activities during the three months ended March 31, 2024 and 2023, respectively. Net cash generated in financing activities for the three months ended March 31, 2024 includes $65.5 million in net draws under our revolving credit facility, offset by $28.7 million in dividend payments, $1.1 million in mortgage notes payable repayment, $0.4 million in deferred financing costs and $0.2 million in the payment of offering costs. Net cash used by financing activities for the three months ended March 31, 2023 includes $27.5 million in dividend payments, $16.7 million in mortgage notes payable repayment, $16.0 million in net pay downs under our revolving credit facility and $0.1 million in the payment of offering costs, offset by $52.4 million in gross proceeds from issuance of shares of our common stock.
Current wording
We generated $50.7 million and used $33.6 million in cash from financing activities during the six months ended June 30, 2024 and 2023, respectively. Net cash generated in financing activities for the six months ended June 30, 2024 includes $150.0 million in note payable issuances and $8.0 million in gross proceeds from issuance of shares of our common stock, offset by $57.5 million in dividend payments, $25.0 million in term loan repayments, $10.6 million in mortgage notes payable repayment, $7.4 million in deferred financing costs, $6.5 million in net paydowns under our revolving credit facility and $0.3 million in the payment of offering costs. Net cash used by financing activities for the six months ended June 30, 2023 includes $55.6 million in dividend payments, $17.8 million in mortgage notes payable repayment, $12.5 million in net pay downs under our revolving credit facility and $0.1 million in the payment of offering costs, offset by $52.4 million in gross proceeds from issuance of shares of our common stock.
Previous wording
We adjust FFO to present Core FFO as an alternative measure of our operating performance, which, when applicable, excludes items which we believe are not representative of ongoing operating results, such as liability management related costs (including losses on extinguishment of debt and modification costs), catastrophic event charges, depreciation of non-real estate assets, and the unconsolidated real estate venture's allocated share of these adjustments. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results. We believe Core FFO more accurately reflects the ongoing operational and financial performance of our core business.
Current wording
We adjust FFO to present Core FFO as an alternative measure of our operating performance, which, when applicable, excludes items which we believe are not representative of ongoing operating results, such as liability management related costs (including losses on extinguishment of debt and modification costs), catastrophic event charges, depreciation of non-real estate assets, provision for credit losses and the unconsolidated real estate venture's allocated share of these adjustments. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results. We believe Core FFO more accurately reflects the ongoing operational and financial performance of our core business.
Previous wording
The following table sets forth a reconciliation of our net income to FFO and Core FFO for the three months ended March 31, 2024 and 2023 (amounts in thousands):
Current wording
The following table sets forth a reconciliation of our net income to FFO and Core FFO for the three and six months ended June 30, 2024 and 2023 (amounts in thousands):
Previous wording
Our Annual Report on Form 10-K for the year ended December 31, 2023 contains a discussion of our significant accounting policies, which utilize relevant critical accounting estimates. During the three months ended March 31, 2024, there were no material changes to the discussion of our significant accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Our Annual Report on Form 10-K for the year ended December 31, 2023 contains a discussion of our significant accounting policies, which utilize relevant critical accounting estimates. During the six months ended June 30, 2024, there were no material changes to the discussion of our significant accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
The $0.3 million increase in Tenant reimbursements is primarily attributable to an increase in tenant project reimbursements.
Current report — wording carried from elsewhere
The $0.2 million increase in Real estate taxes is primarily attributable to the six operating properties acquired since June 30, 2023.
Current report — wording carried from elsewhere
The $0.1 million increase in Corporate general and administrative is primarily due to an increase in professional fees.
Current report — wording carried from elsewhere
Comparison of Results of Operations for the six months ended June 30, 2024 and 2023
Current report — wording carried from elsewhere
The financial information presented below summarizes our results of operations for the six months ended June 30, 2024 and 2023 (amounts in thousands).
Current report — wording carried from elsewhere
The $0.1 million increase in Asset management income is primarily attributable to the fee earned by us for asset management of the JV from the one property acquired since June 30, 2023.
Current report — wording carried from elsewhere
The $0.1 million increase in Other income is primarily attributable to an increase in interest income.
Current report — wording carried from elsewhere
Income from unconsolidated real estate venture
Current report — wording carried from elsewhere
The less than $0.1 million decrease in Income from unconsolidated real estate venture is primarily attributable to higher operating expenses partially offset by operations from the one operating property acquired by the JV since June 30, 2023.
Current report — wording carried from elsewhere
The $5.3 million increase in Interest expense, net is primarily attributable to higher weighted average borrowings and interest rates on our swapped term loans.
Current report — wording carried from elsewhere
$12.1 million in additions to operating properties and $9.0 million in additions to development properties, offset by $0.1 million in real estate acquisitions and deposits.