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Real Estate | 12 Months Ended
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Dec. 31, 2018
Real Estate [Abstract] |
Real Estate | Real Estate As discussed in Note 4, upon closing of the Combination on January 31, 2018, the Company contributed its interests in the CLNY Investment Entities to Colony Credit and deconsolidated these entities, including $219.7 million of primarily net lease properties. The Company's real estate held for investment was as follows:
(In thousands) |  | December 31, 2018 |  | December 31, 2017
Land |  | $ | 1,950,412 |  |  | $ | 2,011,794 |
Buildings and improvements |  | 11,895,642 |  |  | 12,403,794 |
Tenant improvements |  | 163,397 |  |  | 134,709 |
Furniture, fixtures and equipment |  | 389,969 |  |  | 383,855 |
Construction in progress |  | 155,511 |  |  | 108,403 |
|  | 14,554,931 |  |  | 15,042,555 |
Less: Accumulated depreciation |  | (935,917 | ) |  | (578,297 | )
Real estate assets, net |  | $ | 13,619,014 |  |  | $ | 14,464,258 |
Real Estate Sales Results from sales of real estate were as follows:
|  | Year Ended December 31,
(In thousands) |  | 2018 |  | 2017 |  | 2016
Proceeds from sales of real estate |  | $ | 864,347 |  |  | $ | 1,607,806 |  |  | $ | 390,943 |
Gain on sale of real estate |  | 167,231 |  |  | 137,370 |  |  | 73,616 |
Real estate sold or classified as held for sale during the years ended December 31, 2018 and 2017 did not constitute discontinued operations, other than the sale of a manufactured housing portfolio in 2017 that was acquired through the Merger and certain properties in the THL Hotel Portfolio which qualified as held for sale upon acquisition in July 2017, as discussed in Note 18. Real estate held for sale is presented in Note 10. Real Estate Acquisitions The following table summarizes the Company's real estate acquisitions, excluding real estate acquired as part of business combinations discussed in Note 3.
($ in thousands) |  |  |  |  |  | Purchase Price Allocation (1)
| Acquisition Date |  | Property Type and Location |  | Number of Buildings |  | Purchase Price (1) |  | Land and Improvements |  | Building and Improvements |  | Lease Intangible Assets |  | Lease Intangible Liabilities
Year Ended December 31, 2018 |  |  |  |  |  |  |  |  |  |
Asset Acquisitions(2) |  |  |  |  |  |  |  |  |  |  |  |
| September |  | Healthcare—United Kingdom(3) |  | 1 |  | $ | 24,444 |  |  | $ | 10,506 |  |  | $ | 12,458 |  |  | $ | 1,480 |  |  | $ | — |
| November |  | Office and Industrial—France |  | 220 |  | 478,844 |  |  | 125,949 |  |  | 314,661 |  |  | 38,234 |  |  | — |
| Various |  | Industrial—Various in U.S.(4) |  | 40 |  | 569,442 |  |  | 131,334 |  |  | 412,900 |  |  | 30,183 |  |  | (4,975 | )
|  |  |  |  |  |  | $ | 1,072,730 |  |  | $ | 267,789 |  |  | $ | 740,019 |  |  | $ | 69,897 |  |  | $ | (4,975 | )
Year Ended Ended December 31, 2017 |  |  |  |  |  |  |  |  |  |
Asset Acquisitions |  |  |  |  |  |  |  |  |  |  |  |
| January |  | Industrial—Spain |  | 2 |  | $ | 10,374 |  |  | $ | 3,855 |  |  | $ | 5,564 |  |  | $ | 955 |  |  | $ | — |
| June |  | Office—Los Angeles, CA (5) |  | 1 |  | 455,699 |  |  | 93,577 |  |  | 314,590 |  |  | 50,518 |  |  | (2,986 | )
| Various |  | Industrial—Various in U.S. |  | 55 |  | 636,690 |  |  | 137,005 |  |  | 472,747 |  |  | 31,512 |  |  | (4,574 | )
|  |  |  |  |  |  | $ | 1,102,763 |  |  | $ | 234,437 |  |  | $ | 792,901 |  |  | $ | 82,985 |  |  | $ | (7,560 | )
($ in thousands) |  |  |  |  |  | Purchase Price Allocation (1)
| Acquisition Date |  | Property Type and Location |  | Number of Buildings |  | Purchase Price (1) |  | Land and Improvements |  | Building and Improvements |  | Lease Intangible Assets |  | Lease Intangible Liabilities
Year Ended Ended December 31, 2016 |  |  |  |  |  |  |  |  |  |
Business Combinations (6) |  |  |  |  |  |  |  |  |  |  |  |
| January |  | Industrial—Spain |  | 23 |  | $ | 94,403 |  |  | $ | 33,265 |  |  | $ | 56,585 |  |  | $ | 5,318 |  |  | $ | (765 | )
| April |  | Industrial—Massachusetts, U.S. |  | 1 |  | 34,900 |  |  | 5,235 |  |  | 27,731 |  |  | 1,934 |  |  | — |
| May |  | Office—France |  | 1 |  | 18,203 |  |  | 14,150 |  |  | 3,815 |  |  | 388 |  |  | (150 | )
| Various |  | Industrial—Various in U.S. |  | 18 |  | 201,635 |  |  | 36,974 |  |  | 151,689 |  |  | 16,063 |  |  | (3,091 | )
Asset Acquisitions |  |  |  |  |  |  |  |  |  |  |  |
| Various |  | Industrial—Various in U.S. |  | 12 |  | 113,200 |  |  | 20,749 |  |  | 84,724 |  |  | 8,398 |  |  | (671 | )
|  |  |  |  |  |  | $ | 462,341 |  |  | $ | 110,373 |  |  | $ | 324,544 |  |  | $ | 32,101 |  |  | $ | (4,677 | )
__________
(1) | Dollar amounts of purchase price and allocation to assets acquired and liabilities assumed are translated using foreign exchange rates as of the respective dates of acquisition, where applicable.
(2) | Useful life of real estate acquired in 2018 is 5 to 51 years for buildings, 6 to 14 years for site improvements and 4 months (based on remaining lease terms) to 10 years for both tenant improvements and lease intangibles.
(3) | Net leased senior housing acquired pursuant to a purchase option under the Company's development facility to the healthcare operator at a purchase price equivalent to the outstanding loan balance.
(4) | Includes acquisition of $13.1 million of land for co-development with operating partners.
(5) | In September 2017, 90% of equity in the property holding entity was syndicated to third party investors. The new equity partners were granted certain participation rights in the business, resulting in a deconsolidation of the investment. The interest retained by the Company is reflected as an equity method investment.
(6) | Prior to adoption of the new definition of a business effective October 1, 2016, real estate acquisitions with existing leases generally met the definition of a business combination.
Depreciation and Impairment Depreciation expense on real estate was $471.6 million, $453.3 million and $108.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. Refer to Note 14 for discussion of impairment on real estate. Property Operating Income The components of property operating income were as follows:
|  | Year Ended December 31,
(In thousands) |  | 2018 |  | 2017 |  | 2016
Rental income |  | $ | 623,785 |  |  | $ | 672,292 |  |  | $ | 276,404 |
Tenant reimbursements |  | 143,759 |  |  | 138,433 |  |  | 65,657 |
Resident fee income (1) |  | 275,911 |  |  | 286,818 |  |  | — |
Hotel operating income |  | 1,204,285 |  |  | 1,016,294 |  |  | 29,021 |
|  | $ | 2,247,740 |  |  | $ | 2,113,837 |  |  | $ | 371,082 |
__________
(1) | Healthcare properties that operate through management agreements with independent third-party operators through structures permitted by the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”) allow us, through a TRS, to have direct exposure to resident fee income and incur customary related operating expenses.
Future Minimum Rents The Company has operating leases with tenants that expire at various dates through 2061. Future contractual minimum rental payments to be received under noncancelable operating leases for real estate held for investment as of December 31, 2018 are as follows.
Year Ending December 31, |  | (In thousands)
2019 |  | $ | 495,765 |
2020 |  | 464,229 |
2021 |  | 413,416 |
2022 |  | 372,432 |
2023 |  | 327,836 |
2024 and thereafter |  | 1,123,879 |
Total (1) |  | $ | 3,197,557 |
__________
(1) | Excludes hotel operating income and rents from short-term leases.
Commitments and Contractual Obligations Purchase Commitments—At December 31, 2018, the Company had funded aggregate deposits of $6.1 million with remaining unfunded purchase commitments totaling $1.3 billion for the acquisition of 61 buildings in the industrial segment, of which four are under construction. The Company also funded a deposit of $25.1 million with remaining unfunded purchase commitment of $0.3 billion for the acquisition of a distressed hotel operator and its portfolio of six hotels in France alongside the Company's sponsored credit fund. Guarantee Agreements—In connection with the THL Hotel Portfolio, the Company entered into guarantee agreements with various hotel franchisors, pursuant to which the Company guaranteed the payment of its obligations as a franchisee, including payments of franchise fees and marketing fees for the term of the agreements, which expire between 2027 and 2032. In the event of default or termination of the franchise agreements, the Company is liable for liquidated damages not to exceed $81 million. The Company had similar provisions related to its core hotel portfolio in the hospitality segment, but has met the required minimum payments under the respective franchise agreements and no longer has an obligation to the franchisors. Ground Lease Obligation—In connection with real estate acquisitions, the Company assumed certain noncancelable operating ground leases as lessee or sublessee. Rents on certain ground leases are paid directly by the tenants or operators. Ground rent expense, including contingent rent, was $8.2 million, $6.7 million and $0.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. At December 31, 2018, future minimum rental payments on noncancelable ground leases, excluding any contingent rent payments, on real estate held for investment were as follows.
Year Ending December 31, |  | (In thousands)
2019 |  | $ | 5,236 |
2020 |  | 5,318 |
2021 |  | 5,487 |
2022 |  | 5,877 |
2023 |  | 5,821 |
2024 and thereafter |  | 89,276 |
Total |  | $ | 117,015 |

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI http://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI http://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI http://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI http://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI http://asc.fasb.org/topic&trid=2134617 + Details
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