4. Dispositions and Real Estate Assets Held for Sale

Operating Property Dispositions

The following table summarizes the properties sold during the years ended December 31, 2015, 2014 and 2013:



Location	Month of Disposition	Number of Buildings	Rentable Square Feet (unaudited)	Sales Price (in millions) ⁽¹⁾
2015 Dispositions
15050 NE 36th Street, Redmond, WA	April	1	122,103	$	51.2
San Diego Properties - Tranches 1 and 2 ⁽²⁾	April/July	9	924,291	258.0
Total 2015 Dispositions		10	1,046,394	$	309.2

2014 Dispositions ⁽³⁾
San Diego Properties, San Diego, CA ⁽⁴⁾	January	12	1,049,035	$	294.7
9785 & 9791 Towne Centre Drive, San Diego, CA	June	2	126,000	29.5
111 Pacifica, Irvine, CA	September	1	67,496	15.1
4040 Civic Center Drive, San Rafael, CA	October	1	130,237	34.9
999 Town & Country Road, Orange, CA	December	1	98,551	25.3
Total 2014 Dispositions		17	1,471,319	$	399.5

2013 Dispositions ⁽³⁾
26541 Agoura Road, Calabasas, CA	June	1	90,156	$	14.7
8101 Kaiser Boulevard, Anaheim, CA	October	1	59,790	9.6
4910 Directors Place, San Diego CA	December	1	50,360	32.6
Total 2013 Dispositions		3	200,306	$	56.9

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(1)	Represents gross sales price before the impact of broker commissions and closing costs.


(2)	The San Diego Properties - Tranche 1 includes the following properties: 10770 Wateridge Circle, 6200 Greenwich Drive, and 6220 Greenwich Drive. The San Diego Properties - Tranche 2 includes the following properties: 6260 Sequence Drive, 6290, Sequence Drive, 6310 Sequence Drive, 6340 Sequence Drive, 6350 Sequence Drive and 4921 Directors Place.

(3)

The Company adopted ASU 2014-08 effective January 1, 2015 (see Note 2 “Basis of Presentation and Significant Accounting Policies” for additional information). As a result, results of operations for properties disposed of subsequent of January 1, 2015 are presented in continuing operations because they did not represent strategic shifts. Properties disposed of prior to January 1, 2015 are presented in discontinued operations.


(4)	The San Diego Properties included the following: 10020 Pacific Mesa Boulevard, 6055 Lusk Avenue, 5010 and 5005 Wateridge Vista Drive, 15435 and 15445 Innovation Drive, and 15051, 15073, 15231, 15253, 15333 and 15378 Avenue of Science. These properties were held for sale as of December 31, 2013.

The operations of the ten properties sold during the year ended December 31, 2015 are presented in continuing operations for the year ended December 31, 2015. The total gains on sales of the ten properties sold during the year ended December 31, 2015 was $110.0 million. For the year ended December 31, 2014, discontinued operations includes the income and gains on all of the properties sold in 2014. For the year ended December 31, 2013, discontinued operations includes the income and gains on all of the properties sold in 2014 and 2013 (see Note 2 “Basis of Presentation and Significant Accounting Policies” and Note 19 “Discontinued Operations” for additional information).

Operating Properties Held for Sale

As of December 31, 2015, the properties listed below were classified as held for sale. We did not have any properties classified as held for sale as of December 31, 2014.



Properties	Submarket	Property Type	Number of Buildings	Rentable Square Feet (unaudited)
Torrey Santa Fe Properties ⁽¹⁾⁽²⁾	Del Mar	Office	4	465,812

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(1)	The Torrey Santa Fe Properties include the following properties: 7525 Torrey Santa Fe, 7535 Torrey Santa Fe, 7545 Torrey Santa Fe, and 7555 Torrey Santa Fe.


(2)	In January 2016, the Company completed the sale of these properties for a total sales price of $262.3 million.

The major classes of assets and liabilities of the properties held for sale as of December 31, 2015 were as follows:



Real estate assets and other assets held for sale	(in thousands)
Land and improvements	$	10,534
Buildings and improvements	144,716
Undeveloped land and construction in progress	4,824
Total real estate held for sale	160,074
Accumulated depreciation and amortization	(46,191		)
Total real estate held for sale, net	113,883
Deferred rent receivables, net	2,500
Deferred leasing costs and acquisition-related intangible assets, net	1,115
Prepaid expenses and other assets, net	168
Real estate and other assets held for sale, net	$	117,666

Liabilities and deferred revenue of real estate assets held for sale
Secured debt	$	561
Accounts payable, accrued expenses and other liabilities	2,497
Deferred revenue and acquisition-related intangible liabilities, net	2,899
Rents received in advance and tenant security deposits	1,586
Liabilities and deferred revenue of real estate assets held for sale	$	7,543

Land Dispositions

The following table summarizes the land dispositions completed during the years ended December 31, 2015 and 2014:



Properties	Submarket	Month of Disposition	Gross Site Acreage (unaudited)	Sales Price⁽¹⁾ (in millions)
2015 Land Disposition
17150 Von Karman ⁽²⁾	Irvine	January	8.5	$	26.0

2014 Land Disposition
10850 Via Frontera ⁽³⁾	Rancho Bernardo	April	21.0	$	33.1

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(1)	Represents gross sales price before the impact of commissions and closing costs.


(2)	This transaction resulted in a gain on sale of $17.3 million.


(3)	This transaction resulted in a gain on sale of $3.5 million.

Land Held for Sale

As of December 31, 2015 and 2014, the following land parcels were classified as held for sale:



Properties	Submarket	Gross Site Acreage (unaudited)	Sales Price (in millions)
2015 Held for Sale
Carlsbad Oaks - Lot 7 ⁽¹⁾⁽²⁾	Carlsbad	7.6	$	4.5

2014 Held for Sale
17150 Von Karman	Irvine	8.5	$	26.0

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(1)	During the year ended December 31, 2015, the Company recognized a loss relating to selling costs of approximately $0.2 million.


(2)	In January 2016, the Company completed the sale of the Carlsbad Oaks - Lot 7 land parcel.

Restricted Cash Related to Dispositions

As of December 31, 2014, approximately $59.2 million of net proceeds related to the land and office property dispositions during the year ended December 31, 2014 were temporarily being held at a qualified intermediary, at our direction, for the purpose of facilitating Section 1031 Exchanges. The cash proceeds were included in restricted cash on the consolidated balance sheet at December 31, 2014. In January 2015, we successfully completed Section 1031 Exchanges and the $59.2 million of cash proceeds comprising the balances as of December 31, 2014 were released from the qualified intermediary. We did not have any restricted cash related to dispositions or Section 1031 Exchanges as of December 31, 2015.