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Real Estate | 9 Months Ended
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Sep. 30, 2017
Real Estate [Abstract] |
Real Estate | Real Estate The Company's real estate assets were comprised of the following ($ in thousands):
| Net Lease(1) |  | Operating Properties |  | Total
As of September 30, 2017 |  |  |  |  |
Land, at cost | $ | 223,764 |  |  | $ | 209,068 |  |  | $ | 432,832 |
Buildings and improvements, at cost | 926,912 |  |  | 327,574 |  |  | 1,254,486 |
Less: accumulated depreciation | (306,183 | ) |  | (57,273 | ) |  | (363,456 | )
Real estate, net | 844,493 |  |  | 479,369 |  |  | 1,323,862 |
Real estate available and held for sale (2) | — |  |  | 65,658 |  |  | 65,658 |
Total real estate | $ | 844,493 |  |  | $ | 545,027 |  |  | $ | 1,389,520 |
As of December 31, 2016 |  |  |  |  |
Land, at cost | $ | 231,506 |  |  | $ | 211,054 |  |  | $ | 442,560 |
Buildings and improvements, at cost | 987,050 |  |  | 311,283 |  |  | 1,298,333 |
Less: accumulated depreciation | (307,444 | ) |  | (46,175 | ) |  | (353,619 | )
Real estate, net | 911,112 |  |  | 476,162 |  |  | 1,387,274 |
Real estate available and held for sale (2) | 155,051 |  |  | 82,480 |  |  | 237,531 |
Total real estate | $ | 1,066,163 |  |  | $ | 558,642 |  |  | $ | 1,624,805 |
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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 December 31, 2016, net lease includes the Company's ground lease ("GL") assets that were reclassified to "Real estate available and held for sale" (refer to "Dispositions" below). As of December 31, 2016, the carrying value of the Company's GL assets were previously classified as $104.5 million in "Real estate, net," $37.5 million in "Deferred expenses and other assets, net," $8.2 million in "Deferred operating lease income receivable, net" and $3.5 million in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheet. As of September 30, 2017 and December 31, 2016, the Company had $65.7 million and $82.5 million, respectively, of residential properties available for sale in its operating properties portfolio.
In the third quarter 2017, in conjunction with the modification of two master leases, the Company exchanged real property with the tenant. The fair value of the property exchanged exceeded the Company's cost basis by approximately $1.5 million which will be deferred and amortized to "Operating lease income" in the Company's consolidated statements of operations over the remaining master lease terms. Real Estate Available and Held for Sale—During the nine months ended September 30, 2017, the Company transferred one net lease asset with a carrying value of $0.9 million to held for sale due to an executed contract with a third party. During the nine months ended September 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 nine months ended September 30, 2016, the Company also acquired a residential operating property for $0.8 million that had no operations and was sold as of September 30, 2017. During the nine months ended September 30, 2016, the Company acquired land for $3.9 million and simultaneously entered into a 99 year ground lease with the seller. This asset was one of the 12 properties comprising the Company's GL business that was disposed of in April 2017 (see "Disposition of Ground Lease Business" below). Disposition of Ground Lease Business—In April 2017, institutional investors acquired a controlling interest in the Company's GL business through the merger of a Company subsidiary and related transactions (the "Acquisition Transactions"). The Company's GL business was a component of the Company's net lease segment and consisted of 12 properties subject to long-term net leases including seven GLs and one master lease (covering five properties). The acquiring entity was a newly formed unconsolidated entity named Safety, Income & Growth Inc. ("SAFE"). The carrying value of the Company's GL assets was approximately $161.1 million. Shortly before the Acquisition Transactions, the Company completed the $227.0 million 2017 Secured Financing on its GL assets (refer to Note 10). The Company received all of the proceeds of the 2017 Secured Financing. The Company received an additional $113.0 million of proceeds in the Acquisition Transactions, including $55.5 million that the Company contributed to SAFE in its initial capitalization. As a result of the Acquisition Transactions, the Company deconsolidated the 12 properties and the associated 2017 Secured Financing. The Company accounts for its investment in SAFE as an equity method investment (refer to Note 7). The Company accounted for this transaction as an in substance sale of real estate and recognized a gain of $123.4 million, reflecting the aggregate gain less the fair value of the Company's retained interest in SAFE (refer to Note 2 - Summary of Significant Accounting Policies). The carrying value of the 12 properties is classified in "Real estate available and held for sale" on the Company's consolidated balance sheet as of December 31, 2016 and the gain was recorded in "Gain from discontinued operations" in the Company's consolidated statements of operations. Discontinued Operations—The transactions described above involving the Company's GL business qualified for discontinued operations and the following table summarizes income from discontinued operations for the three and nine months ended September 30, 2017 and 2016 ($ in thousands)(1)(2):
|  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
Revenues |  | $ | — |  |  | $ | 4,614 |  |  | $ | 6,430 |  |  | $ | 13,600 |
Expenses |  | — |  |  | (893 | ) |  | (1,491 | ) |  | (2,666 | )
Income from discontinued operations |  | $ | — |  |  | $ | 3,721 |  |  | $ | 4,939 |  |  | $ | 10,934 |
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(1) | The transactions closed on April 14, 2017 and revenues, expenses and income from discontinued operations excludes the period from April 14, 2017 to September 30, 2017. Revenues primarily consisted of operating lease income and expenses primarily consisted of depreciation and amortization and real estate expense.
(2) | For the nine months ended September 30, 2017, cash flows provided by operating activities and cash flows used in investing activities from discontinued operations was $5.7 million and $0.5 million, respectively. For the nine months ended September 30, 2016, cash flows provided by operating activities and cash flows used in investing activities from discontinued operations was $12.9 million and $5.6 million, respectively.
Other Dispositions—During the nine months ended September 30, 2017 and 2016, the Company sold residential condominiums for total net proceeds of $21.8 million and $74.9 million, respectively, and recorded income from sales of real estate totaling $3.3 million and $23.3 million, respectively. During the nine months ended September 30, 2017 and 2016, the Company received net proceeds related to net lease asset sales of $61.7 million and $108.5 million, respectively, resulting in gains of $25.0 million and $15.9 million, respectively. During the nine months ended September 30, 2016, the Company also sold commercial operating properties for net proceeds of $229.1 million resulting in gains of $49.2 million. The gains are recorded in "Income from sales of real estate" in the Company's consolidated statements of operations. Impairments—During the nine months ended September 30, 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 and an impairment of $0.6 million in connection with the sale of an outparcel located at a commercial operating property. During the nine months ended September 30, 2016, the Company recorded impairments of $7.9 million comprised of $3.0 million on a residential operating property resulting from a slowdown in the local condominium real estate market and $4.9 million on the sale of net lease assets. Other Developments—The Company identified properties that sustained damages associated with the recent hurricanes in the United States. The Company has insurance policies in place to cover damages in excess of the Company's deductibles. As of September 30, 2017, the Company has recorded approximately $1.2 million to "Real estate expense" in the Company's consolidated statements of operations to cover expected losses at the properties. 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 $6.1 million and $17.0 million for the three and nine months ended September 30, 2017, respectively. Tenant expense reimbursements were $6.2 million and $18.4 million for the three and nine months ended September 30, 2016, respectively. These amounts are included in "Operating lease income" in the Company's consolidated statements of operations. Allowance for Doubtful Accounts—As of September 30, 2017 and December 31, 2016, the allowance for doubtful accounts related to real estate tenant receivables was $1.2 million and $1.3 million, respectively, and the allowance for doubtful accounts related to deferred operating lease income was $1.1 million and $1.3 million as of September 30, 2017 and December 31, 2016, 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.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI http://asc.fasb.org/topic&trid=2156125 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI http://asc.fasb.org/topic&trid=2134617 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI http://asc.fasb.org/topic&trid=2134977 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI http://asc.fasb.org/topic&trid=2156429 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI http://asc.fasb.org/topic&trid=2134846 + Details
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