Investment in Real Estate

The Company’s acquisitions are accounted for using the acquisition method. The results of operations for each of these acquisitions are included in our consolidated statements of operations from the date of acquisition.

Acquisitions

On April 1, 2015, the Company completed the acquisition of 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 paid for the EOP Northern California Portfolio before certain credits, proration, and closing costs included a cash payment of $1.75 billion (financed with proceeds received from the Company’s January 2015 common equity offering and $1.3 billion of new term debt), an aggregate of 63,474,791 shares of common stock of the company and common units in the Operating Partnership.

On May 22, 2015, the Company acquired a three-story, 120,937-square-foot former manufacturing facility known as “4th & Traction” in Los Angeles, California for $49.3 million (before certain credits, prorations and closing costs). The Company funded this off-market transaction with proceeds from its unsecured revolving credit facility.

Included in the Company’s consolidated financial statements for the six months ended June 30, 2015 were revenues and net income from 2015 acquisitions of $87.6 million and $6.6 million, respectively.

The following table represents our aggregate preliminary purchase price allocation for each of these acquisitions:



	EOP Northern California Portfolio			4th & Traction
Date of Acquisition	April 1, 2015			May 22, 2015		Total
Consideration paid
Cash consideration	$	1,715,346		$	49,250	$	1,764,596
Common stock	87			—		87
Additional paid-in capital	285,358			—		285,358
Non-controlling common units in the Operating Partnership	1,814,936			—		1,814,936
Total consideration	$	3,815,727		$	49,250	$	3,864,977
Allocation of consideration paid
Investment in real estate, net	$	3,611,294		$	49,250	$	3,660,544
Above-market leases	28,745			—		28,745
Above-market ground leases	51,180			—		51,180
Deferred leasing costs and lease intangibles, net	225,440			—		225,440
Below-market leases	(99,837		)	—		(99,837		)
Below-market ground leases	(1,095		)	—		(1,095		)
Total consideration paid	$	3,815,727		$	49,250	$	3,864,977

The table below shows the pro forma financial information for the six months ended June 30, 2015 and 2014 as if the EOP Northern California Portfolio had been acquired as of January 1, 2014.



	Six Months Ended June 30, 2015
	2015			2014
Total revenues	$	297,229		$	364,990
Net income (loss)	$	(3,531	)	$	(1,208	)

During 2014, we acquired 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 allocation 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

Pending Acquisitions

In April 2015, we entered into agreements to purchase two redevelopment properties totaling approximately 80,000 square feet, located in downtown Los Angeles for a purchase price of $40.0 million. We have made non-refundable deposits totaling $1.5 million. We expect to close on this purchase in the third quarter of 2015.

Dispositions

On March 6, 2015, the Company sold its First Financial office property for $89.0 million (before certain credits, prorations, and closing costs). Pursuant to ASU No. 2014-08, we will not be presenting the operating results in net income (loss) from discontinued operations and, in addition, reclassified First Financial’s assets and liabilities to assets and liabilities associated with real estate held for sale as of December 31, 2014.