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Investment in Real Estate | 9 Months Ended
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Sep. 30, 2018
Real Estate [Abstract] |
Investment in Real Estate | Investment in Real Estate Real estate held for investment The following table summarizes the Company’s investment in real estate, at cost as of:
| September 30, 2018 |  | December 31, 2017
Land | $ | 1,365,387 |  | $ | 1,204,700
Building and improvements | 4,593,702 |  | 4,389,846
Tenant improvements | 469,556 |  | 397,012
Furniture and fixtures | 8,965 |  | 8,576
Property under development | 252,764 |  | 219,227
INVESTMENT IN REAL ESTATE, AT COST(1) | $ | 6,690,374 |  | $ | 6,219,361
_____________ 1. Excludes balances related to properties that have been classified as held for sale. Acquisitions The Company’s acquisitions are accounted for using the acquisition method. The results of operations for each of these acquisitions are included in the Company’s Consolidated Statements of Operations from the date of acquisition. The Company evaluates each acquisition to determine if the integrated set of assets and activities acquired meet the definition of a business and need to be accounted for as a business combination in accordance with ASC 805, Business Combinations. An integrated set of assets and activities would fail to qualify as a business if either (i) substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets or (ii) the integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction). An acquired process is considered substantive if (i) the process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce) that is skilled, knowledgeable and experienced in performing the process, (ii) the process cannot be replaced without significant cost, effort, or delay or (iii) the process is considered unique or scarce. The Company assesses fair value based on Level 2 and Level 3 inputs within the fair value framework, which includes estimated cash flow projections that utilize appropriate discount, capitalization rates, renewal probability and available market information, which includes market rental rate and market rent growth rates. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The fair value of acquired “above- and below-” market leases are based on the estimated cash flow projections utilizing discount rates that reflect the risks associated with the leases acquired. The amount recorded is based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended below-market term for any leases with below-market renewal options. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes estimates of lost rents at market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related costs. The fair value of any favorable/unfavorable mark-to-market adjustment of debt assumed is based on the estimated cash flow projections utilizing interest rates available for the issuance of debt with similar terms and remaining maturities. The amount recorded is based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the assumed debt terms (ii) management’s estimate of fair market, measured over a period equal to the remaining term of the debt. The following table summarizes the information on the acquisitions completed during the nine months ended September 30, 2018:
Property |  | Submarket |  | Segment |  | Date of Acquisition |  | Square Feet (unaudited) |  | Purchase Price(1) (in millions)
6605 Eleanor Avenue(2) |  | Hollywood |  | Studio |  | 6/7/2018 |  | 22,823 |  | $ | 18.0
1034 Seward Street(2) |  | Hollywood |  | Studio |  | 6/7/2018 |  | 18,673 |  | 12.0
One Westside and 10850 Pico(3) |  | West Los Angeles |  | Office |  | 8/31/2018 |  | 595,987 |  | 190.0
TOTAL ACQUISITIONS |  |  |  |  |  |  |  | 637,483 |  | $ | 220.0
_____________ 1. Represents purchase price before certain credits, prorations and closing costs. 2. The properties are adjacent to, and now form part of, the Sunset Las Palmas Studios property and consist of sound stages, production office and support space. 3. The Company purchased the property through a joint venture with Macerich. The Company owns 75% of the ownership interest in the consolidated joint venture. The Company’s acquisitions did not meet the definition of a business and were therefore accounted for as asset acquisitions. In accordance with asset acquisitions, the purchase price includes capitalized acquisition costs. The following table represents the Company’s final aggregate purchase price accounting, as of the respective acquisition dates, for each of the Company’s acquisitions completed in the nine months ended September 30, 2018:
| 6605 Eleanor Avenue |  | 1034 Seward Street |  | One Westside and 10850 Pico |  | Total
Total consideration |  |  |  |  |  |  |
Cash consideration for real estate investments | $ | 18,071 |  | $ | 12,095 |  | $ | 40,986 |  | $ | 71,152
Cash consideration for U.S. Government securities | — |  | — |  | 149,176 |  | 149,176
Debt assumed | — |  | — |  | 139,003 |  | 139,003
Redeemable non-controlling interest in consolidated real estate entity | — |  | — |  | 12,749 |  | 12,749
TOTAL CONSIDERATION | $ | 18,071 |  | $ | 12,095 |  | $ | 341,914 |  | $ | 372,080
Allocation of consideration |  |  |  |  |  |  |
Investment in real estate | $ | 18,071 |  | $ | 12,095 |  | $ | 196,444 |  | $ | 226,610
U.S. Government securities | — |  | — |  | 149,176 |  | 149,176
Deferred leasing costs and in-place lease intangibles(1) | — |  | — |  | 826 |  | 826
Above-market leases(2) | — |  | — |  | 605 |  | 605
Below-market leases(3) | — |  | — |  | (5,137) |  | (5,137)
TOTAL | $ | 18,071 |  | $ | 12,095 |  | $ | 341,914 |  | $ | 372,080
_____________ 1. Represents weighted-average amortization period of 4.22 years. 2. Represents weighted-average amortization period of 5.42 years. 3. Represents weighted-average amortization period of 17.19 years. On October 9, 2018, the Company purchased, through a joint venture with Allianz, the Ferry Building property located in San Francisco, California. On October 23, 2018, the Company purchased the 6660 Santa Monica property located in Hollywood, California. See Note 19 for details. Dispositions The following table summarizes the properties sold during the nine months ended September 30, 2018. These properties were non-strategic assets to the Company’s portfolio:
Property |  | Date of Disposal |  | Approximate Square Feet |  | Sales Price(1) (in millions)
Embarcadero Place |  | 1/25/2018 |  | 197,402 |  | $ | 136.0
2600 Campus Drive (building 6 of Peninsula Office Park) |  | 1/31/2018 |  | 63,050 |  | 22.5
2180 Sand Hill |  | 3/1/2018 |  | 45,613 |  | 82.5
9300 Wilshire |  | 4/10/2018 |  | 61,422 |  | 13.8
Peninsula Office Park |  | 7/27/2018 |  | 447,739 |  | 210.0
TOTAL DISPOSITIONS |  |  |  | 815,226 |  | $ | 464.8
_________________ 1. Represents gross sales price before certain credits, prorations and closing costs. These dispositions met the criteria in ASC 610 for recognizing gains of $3.7 million and $43.3 million for the three and nine months ended September 30, 2018, which is included in the gains on sale of real estate line item in the Consolidated Statements of Operations. Held for Sale The Company had five properties classified as held for sale as of December 31, 2017. All five properties have been disposed of during 2018. The Company had no properties classified as held for sale as of September 30, 2018. The following table summarizes the components of assets and liabilities associated with real estate held for sale as of:
| September 30, 2018 |  | December 31, 2017
ASSETS |  |  |
Investment in real estate, net | $ | — |  | $ | 396,846
Accounts receivable, net | — |  | 213
Straight-line rent receivables, net | — |  | 5,225
Deferred leasing costs and lease intangible assets, net | — |  | 9,589
Prepaid expenses and other assets, net | — |  | 58
ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE | $ | — |  | $ | 411,931
LIABILITIES |  |  |
Accounts payable, accrued liabilities and other | $ | — |  | $ | 1,808
Lease intangible liabilities, net | — |  | 485
Security deposits and prepaid rent | — |  | 2,610
LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE | $ | — |  | $ | 4,903
Impairment of Long-Lived Assets No impairment indicators have been noted and the Company recorded no impairment charges for the nine months ended September 30, 2018.

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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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