XML 94 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Real estate
 12 Months Ended
Dec. 31, 2012
Real Estate [Abstract]  
Real estate
Real estate
The Company's real estate assets were comprised of the following ($ in thousands):
 
Net Lease
Assets
 
Operating
Properties
 
Land
 
Total
As of December 31, 2012
 
 
 
 
 
 
 
Land and land improvements
$
344,239

 
$
132,028

 
$
786,114

 
$
1,262,381

Buildings and improvements
1,295,081

 
669,186

 
—

 
1,964,267

Less: accumulated depreciation and amortization
(315,699
)
 
(109,634
)
 
(2,292
)
 
(427,625
)
Real estate, net
$
1,323,621

 
$
691,580

 
$
783,822

 
$
2,799,023

Real estate available and held for sale
—

 
454,587

 
181,278

 
635,865

Total real estate
$
1,323,621

 
$
1,146,167

 
$
965,100

 
$
3,434,888

As of December 31, 2011
 
 
 
 
 
 
 
Land and land improvements
$
378,458

 
$
84,010

 
$
851,272

 
$
1,313,740

Buildings and improvements
1,394,691

 
636,241

 
—

 
2,030,932

Less: accumulated depreciation and amortization
(302,851
)
 
(90,383
)
 
(3,527
)
 
(396,761
)
Real estate, net
$
1,470,298

 
$
629,868

 
$
847,745

 
$
2,947,911

Real estate available and held for sale
—

 
551,998

 
125,460

 
677,458

Total real estate
$
1,470,298

 
$
1,181,866

 
$
973,205

 
$
3,625,369



Real estate available and held for sale—As of December 31, 2012 and 2011, the Company had $374.1 million and $419.0 million, respectively, of residential properties available for sale in its operating properties portfolio. The Company is actively marketing and selling condominium units in these projects. During the years ended December 31, 2012 and 2011, the Company sold condominium units for total net proceeds of $319.3 million and $154.0 million, respectively, and recorded income from sales of residential properties totaling $63.5 million and $5.7 million, respectively.

Real estate assets held for sale included $181.3 million of land assets and $80.5 million of commercial operating properties as of December 31, 2012 and $125.5 million of land assets and $133.0 million of commercial operating properties as of December 31, 2011. During the year ended December 31, 2012, the Company had a change in its business plans to sell two commercial operating properties previously considered held for sale. As of December 31, 2012, the carrying amount of these assets was $49.8 million and was recorded in Real Estate, net. The assets were reclassified at their carrying value prior to classification as held for sale and adjusted for depreciation expense during the held for sale period, which was lower than the assets fair value at the time of the change in plans to sell. In connection with the reclassification of these assets to held and used, the Company reclassified their results of operations for each of the periods presented, as follows:

 
For the Years Ended December 31,
 
2012
 
2011
 
2010
Other income
$
21,148

 
$
21,663

 
$
22,751

Real estate expenses
$
(22,603
)
 
$
(24,297
)
 
$
(25,612
)


Acquisitions—During the year ended December 31, 2012, the Company acquired title to properties previously serving as collateral on its loan receivables with a total fair value of $269.1 million at the time of foreclosure (see Note 5). These properties included $172.4 million of residential operating properties, $63.4 million of commercial operating properties and $33.3 million of land assets.

During the year ended December 31, 2012, the Company also acquired land and other assets with a fair value of $27.3 million from a third party to form a new venture related to one of the Company's commercial operating properties. The third party contributed land into the venture in a non-cash exchange for a non-controlling interest and the Company continues to consolidate the subsidiary. In conjunction with the formation of this new venture, the venture contributed land with a recorded value of $11.6 million in a non-cash exchange for a 40% noncontrolling equity interest in a separate new venture. The Company did not recognize any gains or losses associated with these transactions.

In addition, during 2012, the Company acquired land and other assets with a fair value of $11.5 million from a third party to form a new strategic venture related to one of the Company's active land development projects. The third party contributed land into the venture in a non-cash exchange for a non-controlling interest and the Company continues to consolidate the subsidiary. The Company did not recognize any gains or losses associated with the transaction. Based upon certain rights held by the minority partner in this land venture that provide it with an option to redeem its interest at fair value after seven years, the Company has reflected the partner's non-controlling interest in this venture as a redeemable non-controlling interest within its Consolidated Balance Sheet at December 31, 2012. As it is probable that the interest will become redeemable, subsequent changes in fair value are being accreted over the seven year period from the date of issuance to the earliest redemption date using the interest method. As of December 31, 2012, the estimated redemption value of the redeemable non-controlling interest is $17.9 million.

During the year ended December 31, 2011, the Company acquired title to properties previously serving as collateral on its loan receivables with a total fair value of $502.5 million at the time of foreclosure (see Note 5). These properties included $61.8 million of residential operating properties, $258.8 million of commercial operating properties and $181.9 million of land assets.

Dispositions—During the year ended December 31, 2012, the Company sold a portfolio of 12 net lease assets with an aggregate carrying value of $105.7 million and recorded a gain of $24.9 million resulting from the transaction. Certain of the properties were subject to secured term loans with a remaining principal balance of $50.8 million that were repaid in full at closing (see Note 8). In addition to this portfolio sale, during 2012, the Company sold net lease assets with a carrying value of $9.8 million, resulting in a net gain of $2.4 million. During the year ended December 31, 2012, the Company sold commercial operating properties with an aggregate carrying value of $29.3 million and land assets with a carrying value of $72.1 million for proceeds that approximated carrying value.
During the year ended December 31, 2011, the Company sold net lease assets with carrying values of $34.1 million, resulting in a net gain of $3.2 million. During 2011, the Company also sold commercial operating properties with an aggregate carrying value of $17.9 million and land assets with a carrying value of $9.5 million for proceeds that approximated carrying value.
During the year ended December 31, 2010, the Company completed the sale of a portfolio of 32 net lease assets to a single purchaser for a gross purchase price of $1.35 billion that resulted in a net gain of $250.3 million. The aggregate carrying value of the portfolio of assets was $1.05 billion. At the time of sale, the Company had reduced its gain on sale and recorded a liability based upon certain contingent obligations that have now been fully resolved. Upon resolution of this liability in 2011, the Company realized $22.2 million of the gain previously deferred and recorded the gain in “Gain from discontinued operations” on the Company's Consolidated Statements of Operations for the year ended December 31, 2011. As part of the purchaser's financing for the transaction, the Company provided the purchaser with $105.6 million of mezzanine loans, which have been fully repaid as of December 31, 2012.
In addition to the sale of the portfolio of assets noted above, during the year ended December 31, 2010, the Company sold net lease assets with carrying values of $119.7 million, which resulted in gains of $20.1 million. During 2010, the Company also sold commercial operating properties with a carrying value of $180.6 million and land assets with a carrying value of $3.1 million for proceeds that approximated carrying value.
Discontinued Operations—The following table summarizes income from discontinued operations for the years ended December 31, 2012, 2011 and 2010, respectively ($ in thousands):
 
For the Years Ended December 31,
 
2012
 
2011
 
2010
Revenues
$
5,561

 
$
16,512

 
$
88,536

Total expenses
(2,450
)
 
(14,683
)
 
(62,143
)
Impairment of assets
(22,576
)
 
(9,147
)
 
(9,572
)
Income (loss) from discontinued operations
$
(19,465
)

$
(7,318
)
 
$
16,821



Impairments—During the years ended December 31, 2012, 2011 and 2010 the Company recorded impairments on real estate assets totaling $35.4 million, $22.4 million and $25.2 million. Of these amounts, $22.6 million, $9.1 million and $9.6 million for the years ended December 31, 2012, 2011 and 2010, respectively, have been reclassified to discontinued operations due to the assets being sold or classified as held for sale as of December 31, 2012 (see above).

Intangible assets—As of December 31, 2012, 2011 and 2010, the Company had $59.9 million and $53.6 million, respectively, of unamortized finite lived intangible assets primarily related to the acquisition of real estate assets. The total amortization expense for these intangible assets was $10.6 million, $11.0 million and $9.0 million for the years ended December 31, 2012, 2011 and 2010, respectively. The estimated aggregate amortization costs for each of the five succeeding fiscal years are as follows ($ in thousands):
2013
$
11,534

2014
$
9,221

2015
$
7,589

2016
$
6,770

2017
$
5,721



Future Minimum Operating Lease Payments—Future minimum operating lease payments under non-cancelable leases, excluding customer reimbursements of expenses, in effect at December 31, 2012, are as follows ($ in thousands):
Year
Net Lease Assets
 
Operating Properties
2013
$
126,777

 
$
54,590

2014
$
129,622

 
$
53,516

2015
$
130,871

 
$
48,925

2016
$
128,347

 
$
46,426

2017
$
121,533

 
$
43,754



Tenant Reimbursements—The Company receives reimbursements from tenants for certain facility operating expenses including common area costs, insurance, utilities and real estate taxes. Tenant expense reimbursements for the years ended December 31, 2012, 2011 and 2010 were $30.9 million, $29.4 million and $33.2 million, respectively, and are included in “Operating lease income” on the Company's Consolidated Statements of Operations.