Real Estate

The Company's real estate assets were comprised of the following ($ in thousands):



	Net Lease			Operating Properties			Total
As of June 30, 2016
Land and land improvements, at cost	$	305,424		$	115,306		$	420,730
Buildings and improvements, at cost	1,159,014			282,638			1,441,652
Less: accumulated depreciation	(382,613		)	(43,849		)	(426,462		)
Real estate, net	1,081,825			354,095			1,435,920
Real estate available and held for sale ⁽¹⁾	—			126,070			126,070
Total real estate	$	1,081,825		$	480,165		$	1,561,990
As of December 31, 2015
Land and land improvements, at cost	$	306,172		$	133,275		$	439,447
Buildings and improvements, at cost	1,183,723			427,371			1,611,094
Less: accumulated depreciation	(377,416		)	(79,142		)	(456,558		)
Real estate, net	1,112,479			481,504			1,593,983
Real estate available and held for sale ⁽¹⁾	—			137,274			137,274
Total real estate	$	1,112,479		$	618,778		$	1,731,257

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(1)	As of June 30, 2016 and December 31, 2015, the Company had $110.0 million and $137.3 million, respectively, of residential properties available for sale in its operating properties portfolio.

Real Estate Available and Held for Sale—During the six months ended June 30, 2016, the Company transferred one net lease asset with a carrying value of $0.7 million and one commercial operating property with a carrying value of $16.1 million to held for sale due to executed contracts with third parties. During the six months ended June 30, 2015, the Company transferred net lease assets with a carrying value of $8.2 million to held for sale due to executed contracts with third parties and one commercial operating property with a carrying value of $2.9 million to held for investment due to a change in business strategy.

Acquisitions—During the six months ended June 30, 2016, the Company acquired land for $3.9 million and simultaneously entered into a 99 year ground lease with the seller. During the six months ended June 30, 2015, the Company acquired, via deed-in-lieu, title to a residential operating property which had a total fair value of $13.4 million and previously served as collateral for loans receivable held by the Company. No gain or loss was recorded in connection with this transaction.

Dispositions—During the six months ended June 30, 2016 and 2015, the Company sold residential condominiums for total net proceeds of $59.2 million and $91.3 million, respectively, and recorded income from sales of real estate totaling $18.8 million and $30.9 million, respectively. During the six months ended June 30, 2016 and 2015, the Company sold net lease assets for net proceeds of $30.2 million and $25.6 million, respectively, resulting in gains of $9.2 million and $8.6 million, respectively. During the six months ended June 30, 2016, the Company also sold three commercial operating properties for net proceeds of $158.9 million resulting in gains of $25.9 million. The gains are recorded in "Income from sales of real estate" in the Company's consolidated statements of operations.

During the six months ended June 30, 2015, the Company, through a consolidated entity, sold a leasehold interest in a commercial operating property for net proceeds of $93.5 million and simultaneously entered into a ground lease with an initial term of 99 years. In connection with this transaction, the Company recorded a lease incentive asset of $38.1 million, which is included in "Deferred expenses and other assets, net" on the Company's consolidated balance sheets, and deferred a gain of $5.3 million, which is included in "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheets. In December 2015, the Company acquired the noncontrolling interest in the entity for $6.4 million.

Impairments—During the six months ended June 30, 2016, the Company recorded an impairment of $3.0 million on a residential operating property resulting from a slowdown in the local condominium real estate market. During the six months ended June 30, 2015, the Company recorded an impairment of $1.7 million on a commercial operating property resulting from a change in business strategy.

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 were $5.9 million and $12.2 million for the three and six months ended June 30, 2016, respectively, and $6.7 million and $13.7 million for the three and six months ended June 30, 2015, respectively. These amounts are included in "Operating lease income" in the Company's consolidated statements of operations.

Allowance for Doubtful Accounts—As of June 30, 2016 and December 31, 2015, the allowance for doubtful accounts related to real estate tenant receivables was $1.0 million and $1.9 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.3 million and $1.5 million as of June 30, 2016 and December 31, 2015, respectively.. These amounts are included in "Accrued interest and operating lease income receivable, net" and "Deferred operating lease income receivable, net," respectively, on the Company's consolidated balance sheets.