XML 79 R10.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Investment in Real Estate | 12 Months Ended
--- | ---
Dec. 31, 2014
Real Estate [Abstract] |
Investment in Real Estate | Investment in Real Estate A summary of the activity of our investment in real estate including investment in real estate held for sale (First Financial, Tierrasanta and City Plaza) is as follows:
|  | Year Ended December 31, 2014 |  | Year Ended December 31, 2013 |  | Year Ended December 31, 2012
Investment in real estate |  |  |  |  |  |
Beginning balance |  | $ | 2,035,330 |  |  | $ | 1,475,955 |  |  | $ | 1,060,504 |
Acquisitions |  | 114,008 |  |  | 538,322 |  |  | 390,370 |
Improvements, capitalized costs |  | 128,018 |  |  | 89,707 |  |  | 27,901 |
Disposal |  | (37,615 | ) |  | (9,638 | ) |  | (2,820 | )
Cost of property sold |  | — |  |  | (59,016 | ) |  | — |
Ending Balance |  | $ | 2,239,741 |  |  | $ | 2,035,330 |  |  | $ | 1,475,955 |
Reclassification to assets associated with real estate held for sale |  | (68,446 | ) |  | (82,305 | ) |  | — |
Total Investment in real estate |  | $ | 2,171,295 |  |  | $ | 1,953,025 |  |  | $ | 1,475,955 |
Accumulated depreciation |  |  |  |  |  |
Beginning balance |  | $ | (116,342 | ) |  | $ | (85,184 | ) |  | $ | (53,329 | )
Additions |  | (50,044 | ) |  | (41,454 | ) |  | (34,675 | )
Deletions |  | 23,825 |  |  | 10,296 |  |  | 2,820 |
Ending Balance |  | $ | (142,561 | ) |  | $ | (116,342 | ) |  | $ | (85,184 | )
Reclassification to assets associated with real estate held for sale |  | 7,904 |  |  | 7,931 |  |  | — |
Total Accumulated depreciation |  | $ | (134,657 | ) |  | $ | (108,411 | ) |  | $ | (85,184 | )
Acquisitions On December 6, 2014, the Company entered into an asset purchase agreement to acquire the EOP Northern California Portfolio from Blackstone Real Estate Partners V and VI ("Blackstone"). The EOP Northern California Portfolio consists of 26 high-quality office assets totaling approximately 8.2 million square feet and two development parcels located throughout the San Francisco Peninsula, Redwood Shores, Palo Alto Silicon Valley and San Jose Airport submarkets. The total consideration to be paid for the EOP Northern California Portfolio before certain credits, proration, and closing costs will be a cash payment equal to $1.75 billion and equity consideration totaling 63,474,791 shares of our common stock or common units of limited partnership interest in the Operating Partnership. The Company expects the transaction to close in late first quarter or early second quarter subject to customary closing conditions, including the receipt of the requisite stockholder approval for the equity issued in connection with the transaction. During 2014, we acquired the following properties: Merrill Place, 3402 Pico Blvd., and 12655 Jefferson. The results of operations for each of these acquisitions are included in our consolidated statements of operations from the date of acquisition. The following table represents our purchase price accounting for each of these acquisitions:
| Merrill Place |  | 3402 Pico Blvd. |  | 12655 Jefferson |  |
Date of Acquisition | February 12, 2014 |  | February 28, 2014 |  | October 17, 2014 |  | Total
Consideration paid |  |  |  |  |  |  |
Cash consideration | $ | 57,034 |  |  | $ | 18,546 |  |  | $ | 38,000 |  |  | $ | 113,580 |
Total consideration | $ | 57,034 |  |  | $ | 18,546 |  |  | $ | 38,000 |  |  | $ | 113,580 |
Allocation of consideration paid |  |  |  |  |  |  |
Investment in real estate, net | $ | 57,508 |  |  | $ | 18,500 |  |  | $ | 38,000 |  |  | $ | 114,008 |
Above-market leases | 173 |  |  | — |  |  | — |  |  | 173 |
Deferred leasing costs and lease intangibles, net | 3,163 |  |  | — |  |  | — |  |  | 3,163 |
Below-market leases | (3,315 | ) |  | — |  |  | — |  |  | (3,315 | )
Other (liabilities) asset assumed, net | (495 | ) |  | 46 |  |  | — |  |  | (449 | )
Total consideration paid | $ | 57,034 |  |  | $ | 18,546 |  |  | $ | 38,000 |  |  | $ | 113,580 |
During 2013, we acquired the following properties: 3401 Exposition, Pinnacle II, the Seattle Portfolio, and 1861 Bundy. The results of operations for each of these acquisitions are included in our consolidated statements of operations from the date of acquisition. The following table represents our purchase price accounting for each of these acquisitions:
| 3401 Exposition |  | Pinnacle II |  | Seattle Portfolio |  | 1861 Bundy |  |
Date of Acquisition | May 22, 2013 |  | June 14, 2013 |  | July 31, 2013 |  | September 26, 2013 |  | Total
Consideration paid |  |  |  |  |  |  |  |  |
Cash consideration | $ | 8,489 |  |  | $ | 1,505 |  |  | $ | 368,389 |  |  | $ | 11,500 |  |  | $ | 389,883 |
Notes Receivable | 4,000 |  |  | — |  |  | — |  |  | — |  |  | 4,000 |
Debt Assumed | 13,233 |  |  | 89,066 |  |  | — |  |  | — |  |  | 102,299 |
Non-controlling interest in consolidated real estate entity | — |  |  | 45,704 |  |  | — |  |  | — |  |  | 45,704 |
Total consideration | $ | 25,722 |  |  | $ | 136,275 |  |  | $ | 368,389 |  |  | $ | 11,500 |  |  | $ | 541,886 |
Allocation of consideration paid |  |  |  |  |  |  |  |  |
Investment in real estate, net | $ | 25,439 |  |  | $ | 134,289 |  |  | $ | 367,094 |  |  | $ | 11,500 |  |  | $ | 538,322 |
Deferred leasing costs and lease intangibles, net | — |  |  | 12,637 |  |  | 21,619 |  |  | — |  |  | 34,256 |
Fair market unfavorable debt value | — |  |  | (5,820 | ) |  | — |  |  | — |  |  | (5,820 | )
Below-market leases | — |  |  | (7,783 | ) |  | (14,666 | ) |  | — |  |  | (22,449 | )
Other (liabilities) asset assumed, net | 283 |  |  | 2,952 |  |  | (5,658 | ) |  | — |  |  | (2,423 | )
Total consideration paid | $ | 25,722 |  |  | $ | 136,275 |  |  | $ | 368,389 |  |  | $ | 11,500 |  |  | $ | 541,886 |
During 2012, we acquired the following properties: 10900 Washington, 901 Market Street, Element LA (Olympic Bundy), 1455 Gordon Street and Pinnacle I. The results of operations for each of these acquisitions are included in our consolidated statements of operations from the date of acquisition. The following table represents our purchase price accounting for each of these acquisitions:
| 10900 Washington |  | 901 Market |  | Element LA |  | 1455 Gordon Street |  | Pinnacle I |  |
Date of Acquisition | April 5, 2012 |  | June 1, 2012 |  | September 5, 2012 |  | September 21, 2012 |  | November 8, 2012 |  | Total
Consideration paid |  |  |  |  |  |  |  |  |  |  |
Cash consideration | $ | 2,605 |  |  | $ | 90,871 |  |  | $ | 88,436 |  |  | $ | 2,385 |  |  | $ | 208,023 |  |  | $ | 392,320 |
Non-controlling interest in consolidated real estate entity | — |  |  | — |  |  | — |  |  | — |  |  | 1,481 |  |  | 1,481 |
Total consideration | $ | 2,605 |  |  | $ | 90,871 |  |  | $ | 88,436 |  |  | $ | 2,385 |  |  | $ | 209,504 |  |  | $ | 393,801 |
Allocation of consideration paid |  |  |  |  |  |  |  |  |  |  |
Investment in real estate, net | $ | 2,600 |  |  | $ | 97,187 |  |  | $ | 88,024 |  |  | $ | 2,384 |  |  | $ | 200,175 |  |  | $ | 390,370 |
Above-market leases | — |  |  | — |  |  | — |  |  | — |  |  | 167 |  |  | 167 |
Leases in place | — |  |  | 2,968 |  |  | 1,325 |  |  | 96 |  |  | 11,710 |  |  | 16,099 |
Other lease intangibles | — |  |  | 548 |  |  | 46 |  |  | 22 |  |  | 3,456 |  |  | 4,072 |
Below-market leases | — |  |  | (10,249 | ) |  | (666 | ) |  | (27 | ) |  | (5,076 | ) |  | (16,018 | )
Other (liabilities) asset assumed, net | 5 |  |  | 417 |  |  | (293 | ) |  | (90 | ) |  | (928 | ) |  | (889 | )
Total consideration paid | $ | 2,605 |  |  | $ | 90,871 |  |  | $ | 88,436 |  |  | $ | 2,385 |  |  | $ | 209,504 |  |  | $ | 393,801 |
The table below shows the pro forma financial information for the years ended December 31, 2014 and 2013 as if these properties had been acquired as of January 1, 2013.
| Year Ended December 31,
| 2014 |  | 2013
Total revenues | $ | 253,924 |  |  | $ | 224,102 |
Net loss | $ | 23,540 |  |  | $ | (5,620 | )
Dispositions On December 29, 2014, the Company entered into a purchase and sale agreement to sell its First Financial office property for $89.0 million (before certain credits, prorations, and closing costs). As a result, the Company has reclassified First Financial's assets and liabilities to held for sale as of December 31, 2014 and 2013. The transaction is subject to assumption of an existing $42.4 million loan and is expected to close in the first quarter of 2015. Pursuant to the Company's adoption of ASU No. 2014-08, the Company has not presented the operating results in net income (loss) from discontinued operations. On July 16, 2014, the Company sold its Tierrasanta property for $19.5 million (before certain credits, prorations, and closing costs) and therefore, reclassified Tierrasanta's assets and liabilities to held for sale at July 16, 2014 and December 31, 2013. Pursuant to the Company's adoption of ASU No. 2014-08, the Company has not presented the operating results in net income (loss) from discontinued operations. On May 31, 2013, the Company entered into an agreement to sell its City Plaza property for approximately $56.0 million (before certain credits, prorations, and closing costs). The transaction closed on July 12, 2013. The transaction resulted in an approximately $5.6 million impairment loss. The Company reclassified City Plaza’s results of operations for the years ended December 31, 2014, 2013 and 2012 to discontinued operations on its consolidated statements of operations. The following table sets forth the discontinued operations for the years ended December 31, 2014, 2013 and 2012 for the City Plaza:
|  | Year Ended December 31,
|  | 2014 |  | 2013 |  | 2012
Total office revenues |  | $ | — |  |  | $ | 4,321 |  |  | $ | 5,695 |
Office operating expenses |  | (164 | ) |  | (1,961 | ) |  | (2,978 | )
Depreciation and amortization |  | — |  |  | (789 | ) |  | (2,266 | )
Income from discontinued operations |  | $ | (164 | ) |  | $ | 1,571 |  |  | $ | 451 |
The following table summarizes the components that comprise the assets and liabilities associated with real estate held for sale as of December 31, 2014 and 2013:
|  | Year Ended December 31,
|  | 2014 |  | 2013
ASSETS |  |  |  |
Investment in real estate, net |  | $ | 60,542 |  |  | $ | 74,374 |
Restricted cash |  | 2,839 |  |  | 2,821 |
Straight-line rent receivables |  | 2,151 |  |  | 1,997 |
Deferred leasing costs and lease intangibles, net |  | 2,457 |  |  | 3,693 |
Other |  | 545 |  |  | 360 |
Assets associated with real estate held for sale |  | $ | 68,534 |  |  | $ | 83,245 |
LIABILITIES AND EQUITY |  |  |  |
Liabilities: |  |  |  |
Notes payable |  | $ | 42,449 |  |  | $ | 43,000 |
Accounts payable and accrued liabilities |  | 322 |  |  | 1,393 |
Other |  | 443 |  |  | 731 |
Liabilities associated with real estate held for sale |  | 43,214 |  |  | 45,124 |
Equity |  | 25,320 |  |  | 38,121 |
Total liabilities and equity associated with real estate held for sale |  | $ | 68,534 |  |  | $ | 83,245 |

X
- Details
Name: | us-gaap_RealEstateAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 6 -Subparagraph a -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -SubTopic 360 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-28) -URI http://asc.fasb.org/extlink&oid=6590653&loc=d3e638233-123024 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 28 -Article 12 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Subparagraph Schedule III -Article 5 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 10 -Subparagraph 4 -Article 9 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 11 -Article 9 + Details
Name: | us-gaap_RealEstateDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration