Real Estate

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



	Net Lease⁽¹⁾			Operating Properties			Total
As of March 31, 2017
Land, at cost	$	271,433		$	211,054		$	482,487
Buildings and improvements, at cost	1,097,049			316,726			1,413,775
Less: accumulated depreciation	(370,168		)	(49,503		)	(419,671		)
Real estate, net	998,314			478,277			1,476,591
Real estate available and held for sale ⁽²⁾	—			71,934			71,934
Total real estate	$	998,314		$	550,211		$	1,548,525
As of December 31, 2016
Land, at cost	$	272,666		$	211,054		$	483,720
Buildings and improvements, at cost	1,111,589			311,283			1,422,872
Less: accumulated depreciation	(368,665		)	(46,175		)	(414,840		)
Real estate, net	1,015,590			476,162			1,491,752
Real estate available and held for sale ⁽²⁾	1,284			82,480			83,764
Total real estate	$	1,016,874		$	558,642		$	1,575,516

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(1)

In 2014, the Company partnered with a sovereign wealth fund to form a venture to acquire and develop net lease assets (the "Net Lease Venture") and gave a right of first refusal to the Net Lease Venture on all new net lease investments (refer to Note 7 for more information on the Net Lease Venture). The Company is responsible for sourcing new opportunities and managing the Net Lease Venture and its assets in exchange for a promote and management fee.


(2)	As of March 31, 2017 and December 31, 2016, the Company had $71.9 million and $82.5 million, respectively, of residential properties available for sale in its operating properties portfolio.

Real Estate Available and Held for Sale— During the three months ended March 31, 2016, the Company transferred one net lease asset with a carrying value of $0.7 million to held for sale due to an executed contract with a third party.

Dispositions—During the three months ended March 31, 2017 and 2016, the Company sold residential condominiums for total net proceeds of $10.2 million and $19.7 million, respectively, and recorded income from sales of real estate totaling $1.9 million and $4.9 million, respectively. During the three months ended March 31, 2017 and 2016, the Company sold net lease assets for net proceeds of $20.0 million and $10.0 million, respectively, resulting in gains of $6.7 million and $4.9 million, respectively. During the three months ended March 31, 2016, the Company also sold a commercial operating property for net proceeds of $5.9 million resulting in a gain of $0.7 million. The gains are recorded in "Income from sales of real estate" in the Company's consolidated statements of operations.

Impairments—During the three months ended March 31, 2017, the Company recorded an impairment of $4.4 million on a real estate asset held for sale due to shifting demand in the local condominium market along with a change in the Company's exit 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 $5.7 million and $6.3 million for the three months ended March 31, 2017 and 2016, respectively. These amounts are included in "Operating lease income" in the Company's consolidated statements of operations.

Allowance for Doubtful Accounts—As of March 31, 2017 and December 31, 2016, the allowance for doubtful accounts related to real estate tenant receivables was $1.4 million and $1.3 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.3 million as of March 31, 2017 and December 31, 2016. 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.