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Operating Property Activities
 6 Months Ended
Jun. 30, 2015
Operating Property Activities [Abstract]  
Operating Property Activities

2. Operating Property Activities

 

Acquisitions -

 

During the six months ended June 30, 2015, the Company acquired the following properties, in separate transactions (in thousands):

 

       Purchase Price 
Property Name Location 

Month

Acquired

  Cash*      Debt Assumed   Other     Total     GLA** 
Elmont Plaza Elmont, NY (1) Jan-15 $2,400  $-  $3,358  $5,758   13 
Garden State Pavilion Parcel Cherry Hill, NJ Jan-15  16,300   -   -   16,300   111 
Kimstone Portfolio (39 properties) Various (2) Feb-15  513,513   637,976   236,011   1,387,500   5,631 
Copperfield Village Houston, TX Feb-15  18,700   20,800   -   39,500   165 
Snowden Square Parcel Columbia, MD Mar-15  4,868   -   -   4,868   25 
Dulles Town Crossing Parcel Sterling, VA Mar-15  4,830   -   -   4,830   9 
Flagler Park S.C. Miami, FL Mar-15  1,875   -   -   1,875   5 
West Farms Parcel New Britain, CT Apr-15  6,200   -   -   6,200   24 
Milleridge Inn Jericho, NY Apr-15  7,500   -   -   7,500   - 
Woodgrove Festival Parcels Woodridge, IL Jun-15  5,611   -   -   5,611   12 
      $581,797  $658,776  $239,369  $1,479,942   5,995 

 

* The Company utilized $31.7 million associated with Internal Revenue Code §1031 sales proceeds.

** Gross leasable area ("GLA")

 

 (1)

The Company acquired from its partner the remaining ownership interest in a property that was held in a joint venture in which the Company had a 50.0% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a result, recognized a loss on change in control of interest of $0.2 million resulting from the fair value adjustment associated with the Company’s previously held equity interest, which is reflected in the purchase price above in Other.

 (2)The Company acquired from its partner the remaining ownership interest in 39 properties that were held in a joint venture in which the Company had a 33.3% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a result, recognized a gain on change in control of interest of $140.0 million resulting from the fair value adjustment associated with the Company’s previously held equity interest, which is reflected in the purchase price above in Other.

 

The purchase price for these acquisitions has been preliminarily allocated to real estate and related intangible assets acquired and liabilities assumed, as applicable, in accordance with our accounting policies for business combinations. The purchase price allocations and related accounting will be finalized upon completion of the Company’s valuation studies. The aggregate purchase price of the properties acquired during the six months ended June 30, 2015, has been preliminarily allocated as follows (in thousands): 

 

Land $406,252 
Buildings  836,417 
Above Market Rents  31,659 
Below Market Rents  (66,407)
In-Place Leases  148,435 
Building Improvements  120,925 
Tenant Improvements  21,761 
Mortgage Fair Value Adjustment  (21,573)
Other Assets  2,637 
Other Liabilities  (164)
  $1,479,942 

 

During the six months ended June 30, 2015, the Company acquired three land parcels, in separate transactions, for an aggregate purchase price of $30.0 million.

 

Additionally, during the six months ended June 30, 2015, the Company acquired the remaining interest in a previously consolidated joint venture for $30.5 million. The Company continues to consolidate this entity as there was no change in control from this transaction. The purchase of the remaining interest resulted in a decrease in noncontrolling interest of $25.0 million and a decrease of $5.4 million to the Company’s Paid-in capital.

 

Dispositions –

 

During the six months ended June 30, 2015, the Company disposed of 54 operating properties and four out parcels, in separate transactions, for an aggregate sales price of $191.1 million. These transactions resulted in an aggregate gain of $58.6 million, after income tax expense and aggregate impairment charges of $1.3 million.

 

During the six months ended June 30, 2015, the Company classified as held-for-sale 15 operating properties. The aggregate book value of these properties was $34.6 million, net of accumulated depreciation of $1.0 million, which is included in Other assets on the Company’s Condensed Consolidated Balance Sheets.  The book value of these properties did not exceed their estimated fair value, less costs to sell, and as such no impairment charges were recognized. The Company’s determination of the fair value of these properties was based upon executed contracts of sale with third parties. Additionally, the Company reclassified $16.3 million in mortgage debt related to one of the properties classified as held-for-sale to Other liabilities on the Company’s Condensed Consolidated Balance Sheets.

 

Upon the adoption of ASU 2014-08 on January 1, 2015, operations of properties held for sale and operating properties sold during the current period that were not previously classified as held for sale and/or reported as discontinued operations are reported in income from continuing operations as they do not represent a strategic shift that has or will have a major effect on our operations and financial results. Prior to the adoption of ASU 2014-08, the Company reported the operations and financial results of properties held for sale and operating properties sold as Discontinued operations in the Company’s Condensed Consolidated Statements of Income.

 

Impairment Charges -

 

During the six months ended June 30, 2015, the Company recognized aggregate impairment charges of $21.9 million which are included in Impairment charges under Operating expenses on the Company’s Condensed Consolidated Statements of Income. These impairment charges consist of (i) $1.3 million related to the sale of certain operating properties, as discussed above, (ii) $15.8 million related to adjustments to property carrying values for which the Company has decided to market for sale as part of its active capital recycling program and as such has adjusted the anticipated hold periods for such properties, (iii) $4.0 million primarily related to pending sale of an investment in other real estate investments and (iv) $0.8 million related to marketable debt securities investment. The Company’s estimated fair value on the properties pending disposition were determined based upon estimated sales price and appraisals. (See Footnote 11 for fair value disclosure).