Copper Property CTL Pass Through Trust Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INVESTMENT PROPERTIES

INVESTMENT PROPERTIES

12 Months Ended

Dec. 31, 2021

As of the Effective Date, the Trust obtained control of a real estate portfolio that consisted of 160 Retail Properties and 6 Warehouses located across 37 U.S. states and Puerto Rico. The January 30, 2021 balance sheet reflects the recorded fair value of the assets and liabilities that existed on the Effective Date and emergence from bankruptcy.

The following table summarizes the recorded fair value by property type as of the Effective Date:


Property Type	Ownership	Square Footage (unaudited)	Fair Value
Retail	Fee Simple	18,326	$	1,234,100
	Ground Leasehold	3,386	203,208
Warehouse	Fee Simple	10,109	497,900
		31,821	$	1,935,208

As of the Effective Date, the weighted average amortization period for lease intangible assets and lease intangible liabilities was 19.9 years.

The following table presents the amortization during the next five years and thereafter related to the lease intangible assets and liabilities for properties owned as of December 31, 2021, excluding the Retail Property classified as held for sale:


	2022		2023		2024		2025		2026		Thereafter		Total
Amortization of:
Above market lease intangibles (a)	$	8,001	$	8,001	$	8,001	$	8,001	$	8,001	$	112,013	$	152,018
In-place lease intangibles (a)	5,399		5,399		5,399		5,399		5,399		75,587		102,582
Lease intangible assets, net	$	13,400	$	13,400	$	13,400	$	13,400	$	13,400	$	187,600	$	254,600

Below market lease intangibles (a)	$	6,672	$	6,672	$	6,672	$	6,672	$	6,672	$	93,409	$	126,769
Lease intangible liabilities, net	$	6,672	$	6,672	$	6,672	$	6,672	$	6,672	$	93,409	$	126,769

(a) Represents the portion of the leases in which the Trust is the lessor. The amortization of above and below market lease intangibles is recorded as an adjustment to lease income and the amortization of in-place lease intangibles is recorded to depreciation and amortization expense.

Lease intangible assets, net and lease intangible liabilities, net are presented net of $12,283 and $6,116 of accumulated amortization, respectively, as of December 31, 2021.

As of the December 31, 2021, the weighted average amortization period for lease intangible assets and lease intangible liabilities was 19.0 years.

Amortization expense pertaining to in-place lease intangibles was $6,397 from the Effective Date to December 31, 2021.

Amortization pertaining to above market lease intangibles of $7,637 from the Effective Date to December 31, 2021, was recorded as a reduction to “Lease income” in the accompanying consolidated statement of operations.

Amortization pertaining to below market lease intangibles of $7,232 from the Effective Date to December 31, 2021, was recorded as an increase to “Lease income” in the accompanying consolidated statement of operations.

Dispositions

During the period from the Effective Date to December 31, 2021, the Trust sold thirteen Retail Properties and six Warehouses for proceeds of $793,647, which is net of sales and closing costs, and the Trust recorded a net gain on sales of investment properties of $109,696. After the sale date for these Retail Properties, the Trust received $333 from New JCP for rent obligations for a period subsequent to sale. The Trust repaid these amounts subsequent to December 31, 2021 and has recorded these amounts as "Other liabilities" on the accompanying consolidated balance sheets.

The following table summarizes dispositions for the period from the Effective Date to December 31, 2021:


Sale Date	Location		Property Type	Ownership	Square Footage (unaudited)	Gross Sales Proceeds		Aggregate Proceeds, Net		Gain (Loss)
7/9/21	San Diego, CA		Retail	Ground Lease	269	$	14,750	$	14,523	$	—	(3)
7/29/21	Lone Tree, CO		Retail	Fee Simple	151	7,000		6,773		466
7/29/21	Frisco, TX		Retail	Fee Simple	164	10,500		10,300		291
9/14/21	San Bruno, CA		Retail	Fee Simple	223	105,250		99,991		38,543
9/30/21	Carson, CA		Retail	Fee Simple	201	19,000		18,310		2,675
11/03/21	Houston, TX		Retail	Fee Simple	140	12,000		11,788		2,489
11/05/21	San Antonio, TX		Retail	Fee Simple	104	12,500		12,057		3,148
11/17/21	Phoenix, AZ		Retail	Fee Simple	159	7,000		6,896		1,236
11/19/21	Texas Portfolio	(1)	Retail	Fee Simple	325	20,600		20,192		936
12/17/21	Distribution Center Portfolio	(2)	Warehouse	Fee Simple	10,109	557,165		548,352		59,702
12/23/21	Queens, NY		Retail	Fee Simple	204	40,500		38,785		—		(3)
12/29/21	Woodbury, MN		Retail	Fee Simple	82	5,750		5,680		210
					12,131	$	812,015	$	793,647	$	109,696

(1) Portfolio comprised of three Retail Properties located in Fairview, TX, Flower Mound, TX, and Round Rock, TX.

(2) Portfolio comprised of six Warehouses located in Statesville, NC, Columbus, OH, Lenexa, KS, Reno, NV, Haslet, TX, and Atlanta, GA.

(3) Prior to disposition, these Properties were remeasured to fair value and a provision for impairment of $1,951 was recognized (See Note 5).

The dispositions completed from the Effective Date to December 31, 2021 did not qualify for discontinued operations treatment.

Investment Properties Held for Sale

The following Retail Property was classified as held for sale as of December 31, 2021:


Date of Sale	Location	Gross Sales Price		Carrying value at December 31, 2021
1/6/2022	Culver City, CA	$	22,000	$	17,091

Real estate held for sale consisted of the following at December 31, 2021:


	December 31, 2021
Land and improvements	$	10,250
Building and other improvements	7,066
Less: accumulated depreciation	(193)
Net investment properties	17,123
Accounts receivable	535
Lease intangible assets, net	1,391
Other assets	166
Assets associated with investment properties held for sale	19,215

Accounts payable and accrued expenses	43
Lease intangible liabilities, net	1,979
Other liabilities	102
Liabilities associated with investment properties held for sale	$	2,124