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Property and Equipment, Net

12 Months Ended

Jun. 30, 2024

Property, Plant And Equipment [Abstract]

Property and Equipment, Net

11. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


				June 30,
		Useful Life		2024			2023
Land		-		$	31,776		$	35,956
Buildings and improvements		10 - 31 years			200,274			206,349
Leasehold improvements		Shorter of asset useful life or lease term			114,019			99,777
Furniture and equipment		3 - 8 years			103,961			125,594
Software		3 - 5 years			113,219			92,212
Construction in progress		-			11,554			23,390
Property and equipment, gross					574,803			583,278
Accumulated depreciation					(326,279)			(338,629)
Property and equipment, net				$	248,524		$	244,649

Depreciation expense was $39.7 million, $41.4 million, and $44.6 million for the years ended June 30, 2024, 2023, and 2022, respectively.

During the second quarter of fiscal year 2024, management committed to a plan to sell a building owned by Adtalem located in Naperville, Illinois, and the building met criteria to be classified as assets held for sale. As a result, the building’s carrying value of $8.4 million was adjusted to its estimated fair value less cost to sell of $7.8 million, and the resulting $0.6 million charge was recognized within student services and administrative expense in the Consolidated Statements of

Income for the year ended June 30, 2024. In addition, the building is presented as assets held for sale on the Consolidated Balance Sheets as of June 30, 2024.

On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep for $52.0 million. Adtalem received $5.2 million of cash at the time of closing and held a mortgage, secured by the property, from DePaul College Prep for $46.8 million. The mortgage was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. The buyer had an option to make prepayments. Due to Adtalem’s involvement with financing the sale, the transaction did not qualify as a sale for accounting purposes. Adtalem continued to maintain the assets associated with the sale on the Consolidated Balance Sheets. We recorded a note receivable of $40.3 million and a financing payable of $45.5 million at the time of the sale, which were classified as other assets, net and other liabilities, respectively, on the Consolidated Balance Sheets. See Note 10 “Accounts and Financing Receivables” for a discussion on the discounting of the note receivable. On February 23, 2023, DePaul College Prep paid the mortgage in full. The $46.8 million received during fiscal year 2023 is classified as an investing activity in the Consolidated Statements of Cash Flows. Upon receiving full repayment of the mortgage, Adtalem no longer is involved in the financing of the sale and therefore derecognized the note receivable, the financing payable, and the assets associated with the campus facility, which resulted in recognizing a gain on sale of assets of $13.3 million in fiscal year 2023. This gain was recorded at Adtalem’s home office, which is classified as “Home Office” in Note 22 “Segment Information.”