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Real Estate Investments | 12 Months Ended
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Dec. 31, 2016
Real Estate [Abstract] |
REAL ESTATE INVESTMENTS | 3. REAL ESTATE INVESTMENTS As of December 31, 2016 and 2015 the gross carrying value of the Company’s Properties was as follows (in thousands):
| December 31, |  | December 31,
| 2016 |  | 2015
Land | $ 469,522 |  | $ 513,268
Building and improvements | 2,683,087 |  | 2,719,780
Tenant improvements | 433,686 |  | 459,952
Operating properties | 3,586,295 |  | 3,693,000
Assets held for sale - real estate investments (a) | 73,591 |  | 794,588
Total | $ 3,659,886 |  | $ 4,487,588
| (a) | Real estate investments related to assets held for sale above represents gross real estate assets and does not include accumulated depreciation or other assets on the balance sheets of the properties held for sale. See Held for Sale section below.
Acquisitions and Dispositions 2016 Acquisition On July 1, 2016, the Company closed on the acquisition of 34.6 acres of land located in Austin, Texas known as the Garza Ranch for a gross purchase price of $20.6 million. The Company accounted for this transaction as an asset acquisition and capitalized approximately $1.9 million of acquisition related costs and closing costs as part of land held for development on its consolidated balance sheet. The Company funded the acquisition with $20.4 million of available corporate funds, net of prorations and other adjustments. As of December 31, 2016, the Company is under agreement to sell 9.5 acres (of the 34.6 acres) to two unaffiliated third parties. As of December 31, 2016, the land under this agreement of sale did not meet the criteria to be classified as held for sale. The Company has a continuing involvement through a completion guaranty, which requires the Company, as developer, to complete certain infrastructure improvements on behalf of the buyers of the land parcels. See Note 21, “Subsequent Events,” for information related to the sale of 1.7 acres. Dispositions The Company sold the following properties during the twelve-month period ended December 31, 2016 (dollars in thousands):
Disposition Date |  | Property/Portfolio Name |  | Location |  | Number of Properties |  | Rentable Square Feet |  |  | Sales Price |  |  | Net Proceeds on Sale |  |  | Gain/(Loss) on Sale (a) |  |
October 13, 2016 |  | 620, 640, 660 Allendale Road |  | King of Prussia, PA |  | 3 |  |  | 156,669 |  |  | $ | 12,800 |  |  | $ | 12,014 |  |  | $ | 2,382 |  |
September 1, 2016 |  | 1120 Executive Plaza |  | Mt. Laurel, NJ |  | 1 |  |  | 95,183 |  |  |  | 9,500 |  |  |  | 9,241 |  |  |  | (18 | ) | (b)
August 2, 2016 |  | 50 East Clementon Road |  | Gibbsboro, NJ |  | 1 |  |  | 3,080 |  |  |  | 1,100 |  |  |  | 1,011 |  |  |  | (85 | ) |
May 11, 2016 |  | 196/198 Van Buren Street (Herndon Metro Plaza I&II) |  | Herndon, VA |  | 2 |  |  | 197,225 |  |  |  | 44,500 |  |  |  | 43,412 |  |  |  | (752 | ) | (c)
February 5, 2016 |  | 2970 Market Street (Cira Square) |  | Philadelphia, PA |  | 1 |  |  | 862,692 |  |  |  | 354,000 |  |  |  | 350,150 |  |  |  | 115,828 |  |
February 4, 2016 |  | Och-Ziff Portfolio |  | Various (d) |  | 58 |  |  | 3,924,783 |  |  |  | 398,100 |  |  |  | 353,971 |  |  |  | (372 | ) | (e)
Total Dispositions |  |  |  |  |  | 66 |  |  | 5,239,632 |  |  | $ | 820,000 |  |  | $ | 769,799 |  |  | $ | 116,983 |  |
| (a) | Gain/(Loss) on Sale is net of closing and other transaction related costs.
| (b) | As of June 30, 2016, the Company determined that the sale of the property was probable and classified this property as held for sale in accordance with applicable accounting standards for long lived assets. At such date, the carrying value of the property exceeded the fair value less the anticipated costs of sale. As a result, the Company recognized a provision for impairment totaling approximately $1.8 million during the three-month period ended June 30, 2016. The fair value measurement was based on the pricing in the purchase and sale agreement for the sale of the property. As the pricing in the purchase and sale agreement is unobservable, the Company determined that the inputs utilized to determine fair value for this property falls within Level 3 in accordance with the fair value hierarchy established by Accounting Standards Codification (ASC) Topic 820, "Fair Value Measurements and Disclosures.” The loss on sale represents additional closing costs recognized at closing.
| (c) | During the three-month period ended March 31, 2016, the Company recognized a provision for impairment totaling approximately $7.4 million on the properties. See “Held for Use Impairment” section below. The loss on sale primarily relates to additional closing costs recognized at closing.
| (d) | Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on February 10, 2016 contains a complete list of the 58 properties disposed of in the transactions with Och-Ziff Capital Management Group LLC. See Note 4, "Investment in Unconsolidated Real Estate Ventures," for further details of the transactions.
| (e) | During the three-month period ended December 31, 2015, the Company recognized a provision for impairment totaling approximately $45.4 million. The loss on sale represents additional closing costs recognized at closing.
The Company sold the following land parcels during the twelve-month period ended December 31, 2016 (dollars in thousands):
Disposition Date |  | Property/Portfolio Name |  | Location |  | Number of Parcels |  |  | Acres |  |  | Sales Price |  |  | Net Proceeds on Sale |  |  | Gain on Sale (a) |  |
December 2, 2016 |  | Oakland Lot B |  | Oakland, CA |  |  | 1 |  |  |  | 0.9 |  |  | $ | 13,750 |  |  | $ | 13,411 |  |  | $ | 9,039 |  |
August 19, 2016 |  | Highlands Land |  | Mt. Laurel, NJ |  |  | 1 |  |  |  | 2.0 |  |  |  | 288 |  |  |  | 284 |  |  |  | 193 |  |
January 15, 2016 |  | Greenhills Land |  | Reading, PA |  |  | 1 |  |  |  | 120.0 |  |  |  | 900 |  |  |  | 837 |  |  |  | - |  | (b)
Total Dispositions |  |  |  |  |  |  | 3 |  |  |  | 122.9 |  |  | $ | 14,938 |  |  | $ | 14,532 |  |  | $ | 9,232 |  |
| (a) | Gain on Sale is net of closing and other transaction related costs.
| (b) | The carrying value of the land exceeded the fair value less the anticipated costs of sale as of December 31, 2015, therefore the Company recognized an impairment loss of $0.3 million during the three-month period ended December 31, 2015. There was no gain or loss recognized on the sale during 2016.
Held for Use Impairment As of December 31, 2016, the Company evaluated the recoverability of the carrying value of its properties that triggered assessment under the undiscounted cash flow model. Based on the Company’s evaluation, it was determined that due to the reduction in the Company’s intended hold period of three properties located in the Other segment, the Company would not recover the carrying values of these properties. Accordingly, the Company recorded impairment charges on these properties of $7.3 million at December 31, 2016, reducing the aggregate carrying values of the properties from $25.8 million to their estimated fair value of $18.5 million. The Company measured these impairments based on a discounted cash flow analysis, using a hold period of 10 years and residual capitalization rates and discount rates of 8.75% and 9.00%, respectively. The results were comparable to indicative pricing in the market. The assumptions used to determine fair value under the income approach are Level 3 inputs in accordance with the fair value hierarchy established by Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures.” During the three-month period ended June 30, 2016, the Company evaluated the recoverability of the carrying value of its properties that triggered assessment under the undiscounted cash flow model. Based on the analysis, the Company determined that due to the reduction in the Company’s intended hold period of a property located in the Metropolitan D.C. segment, the Company would not recover the carrying values of that property. Accordingly, the Company recorded an impairment charge on the property of $3.9 million at June 30, 2016, reducing the aggregate carrying value of the property from $37.4 million to its estimated fair value of $33.5 million. The Company measured this impairment based on a discounted cash flow analysis, using a hold period of 10 years and residual capitalization rate and discount rate of 7.75% and 8.25%, respectively. The results were comparable to indicative pricing in the market. The assumptions used to determine fair value under the income approach are Level 3 inputs in accordance with the fair value hierarchy established by Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures.” During the three-month period ended March 31, 2016, the Company evaluated the recoverability of the carrying value of the properties that triggered assessment under the undiscounted cash flow model. Based on the analysis, the Company determined that due to a reduction in the Company’s intended hold period, the Company would not recover the carrying value of two properties located in its Metropolitan D.C. segment. Accordingly, the Company recorded an impairment charge of $7.4 million at March 31, 2016 reducing the aggregate carrying values of these properties from $51.9 million to their estimated fair values of $44.5 million. The Company measured these impairments based on a discounted cash flow analysis, using a hold period of 10 years and residual capitalization rates and discount rates of 7.0%. The results were comparable to indicative pricing in the market. The assumptions used to determine fair value under the income approach are Level 3 inputs in accordance with the fair value hierarchy established by Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures.” Land Impairments As of December 31, 2016, the Company assessed the fair value of the land parcels within its Other segment that it intends to sell in the short-term and, based on that assessment, the Company determined that it would not recover the carrying value of five land parcels, consisting of 108 acres. Accordingly, the Company recorded impairment charges of $5.6 million at December 31, 2016, reducing the aggregate carrying value of the land parcels from $18.2 million to their estimated fair values of $12.6 million. The Company measured these impairments using indicative pricing in the markets in which each land parcel is located. The assumptions used to determine fair value under the market approach are Level 3 inputs in accordance with the fair value hierarchy established by Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures.” Held for Sale The following is a summary of properties classified as held for sale at December 31, 2016 but which did not meet the criteria to be classified within discontinued operations at December 31, 2016 (in thousands):
| Held for Sale Properties Included in Continuing Operations |
| December 31, 2016 |
| Metropolitan D.C. - Office (a) |  |  | Other Segment - Office (b) |  |  | Other Segment - Land (c) |  |  | Total |
ASSETS HELD FOR SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating properties | $ | 21,720 |  |  | $ | 51,871 |  |  | $ | - |  |  | $ | 73,591 |
Accumulated depreciation |  | (11,935 | ) |  |  | (20,981 | ) |  |  | - |  |  |  | (32,916 | )
Operating real estate investments, net |  | 9,785 |  |  |  | 30,890 |  |  |  | - |  |  |  | 40,675 |
Land held for development |  | - |  |  |  | - |  |  |  | 1,043 |  |  |  | 1,043 |
Total real estate investments, net |  | 9,785 |  |  |  | 30,890 |  |  |  | 1,043 |  |  |  | 41,718 |
Total assets held for sale, net | $ | 9,785 |  |  | $ | 30,890 |  |  | $ | 1,043 |  |  | $ | 41,718 |
LIABILITIES HELD FOR SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other liabilities | $ | 73 |  |  | $ | 8 |  |  | $ | - |  |  | $ | 81 |
Total liabilities held for sale | $ | 73 |  |  | $ | 8 |  |  | $ | - |  |  | $ | 81 |
| (a) | As of December 31, 2016, the Company determined that the sale of three office properties in the Metropolitan D.C. segment was probable and classified these properties as held for sale in accordance with applicable accounting standards for long lived assets. At such date, the carrying value of the properties exceeded their fair value less the anticipated costs of sale. As a result, the Company recognized an impairment loss totaling approximately $3.0 million during the three-month period ended December 31, 2016. The Company measured this impairment based on a discounted cash flow analysis, using a hold period of 10 years and residual capitalization rates and discount rates of 9.00% and 10.00%, respectively. The results were comparable to indicative pricing in the market. As significant inputs to the model are unobservable, the Company determined that the value determined for this property falls within Level 3 fair value reporting.
| (b) | As of December 31, 2016, the Company determined that the sale of two office properties in the Other segment was probable and classified these properties as held for sale in accordance with applicable accounting standards for long lived assets. At such date, the carrying value of the properties exceeded the fair value less the anticipated costs of sale. As a result, the Company recognized an impairment loss totaling approximately $11.5 million during the three-month period ended December 31, 2016. The Company measured this impairment based on a discounted cash flow analysis, using a hold period of 10 years and residual capitalization rates and discount rates of 9.75% and 9.75%, respectively. The results were comparable to indicative pricing in the market. As significant inputs to the model are unobservable, the Company determined that the value determined for this property falls within Level 3 fair value reporting.
| (c) | As of December 31, 2016, the Company determined that the sale of a land parcel in the Other segment was probable and classified the land parcel as held for sale in accordance with applicable accounting standards for long lived assets. At such date, the carrying value of the land approximated the fair value less the anticipated costs of sale and the Company recorded a nominal impairment. The fair value measurement was based on the pricing in the purchase and sale.
The sales of the Company’s fee interests in the properties referenced above do not represent a strategic shift that has a major effect on the Company's operations and financial results. As a result, the operating results of these properties remain classified within continuing operations for all periods presented. See Note 21, "Subsequent Events," for further information regarding these dispositions. 2015 Acquisitions On July 7, 2015, the Company acquired a 0.8 acre parcel of land located at 2100 Market Street in Philadelphia, Pennsylvania for $18.8 million. The Company funded $16.8 million of the purchase price with available corporate funds and the remaining $2.0 million of the purchase price was deferred until the earlier of the commencement of development or 24 months from settlement. The Company accounted for this transaction as an asset acquisition and capitalized a nominal amount of acquisition related costs and other costs as part of land inventory on its consolidated balance sheet. In connection with the purchase agreement, if certain land parcels adjacent to 2100 Market Street are acquired from unaffiliated third parties, the Company may be required to pay additional consideration to the seller of 2100 Market Street. The unaffiliated third parties are not party to this transaction and any land parcels acquired will be acquired in arm’s length transactions. The amount of additional consideration, if any, payable to the seller of 2100 Market Street cannot be determined at this time. The Company has not yet determined the timing and cost of construction for the project as of December 31, 2015. On June 22, 2015, through a series of transactions with International Business Machines ("IBM"), the Company acquired the remaining 50.0% interest in Broadmoor Austin Associates, consisting of seven office buildings and the 66.0 acre underlying land parcel located in Austin, Texas, for an aggregate purchase price of $211.4 million. The aggregate purchase price includes the carrying amount of the Company’s investment in Broadmoor Austin Associates of $66.3 million. The office buildings contain 1,112,236 net rentable square feet of office space and were 100.0% occupied as of June 22, 2015. The Company funded the cost of the acquisition with an aggregate cash payment of $143.8 million, consisting of $81.0 million from available corporate funds and $62.8 million previously held in escrow related to a Section 1031 like-kind exchange. Part of the cash payment was used at closing to repay, at no repayment penalty, the remaining $51.2 million of secured debt. The Company incurred $0.2 million of acquisition related costs that are classified within general and administrative expenses. The Company previously accounted for its 50.0% non-controlling interest in Broadmoor Austin Associates under the equity method of accounting. As a result of acquiring IBM's remaining 50.0% common interest in Broadmoor Austin Associates, the Company obtained control of Broadmoor Austin Associates and the Company's existing investment balance was remeasured based on the fair value of the underlying properties acquired and the existing distribution provisions under the relevant partnership agreement. As a result, the Company recorded a $0.8 million gain on remeasurement. Broadmoor Austin Associates contributed revenue, included in the Company’s consolidated income statements, of $26.4 million and $13.2 million and net losses of $5.2 million and $7.2 million for the twelve-months ended December 31, 2016 and 2015, respectively. The Company has treated its acquisition of the 50.0% ownership interest in Broadmoor Austin Associates as a business combination and allocated the purchase price to the tangible and intangible assets and liabilities. The Company utilized a number of sources in making estimates of fair values for purposes of allocating the purchase price to tangible and intangibles assets acquired and intangible liabilities assumed. The purchase price has been allocated as follows (in thousands):
|  | June 22, 2015 |
Building, land and improvements |  | $ | 163,271 |
Land inventory |  |  | 6,045 |
Intangible assets acquired (a) |  |  | 50,637 |
Below market lease liabilities assumed (b) |  |  | (8,600 | )
|  | $ | 211,353 |
Return of existing equity method investment |  |  | (66,324 | )
Gain on remeasurement |  |  | (758 | )
Net working capital assumed |  |  | (450 | )
Total cash payment at settlement |  | $ | 143,821 |
| (a) | Weighted average amortization period of 4.0 years.
| (b) | Weighted average amortization period of 1.5 years
The unaudited pro forma information below summarizes the Company’s combined results of operations for the years ended December 31, 2015 and 2014, respectively, as though the acquisition of Broadmoor Austin Associates was completed on January 1, 2014. The supplemental pro forma operating data is not necessarily indicative of what the actual results of operations would have been assuming the transaction had been completed as set forth above, nor do they purport to represent the Company’s results of operations for future periods (in thousands, except for per share amounts).
|  | December 31, |
|  | 2015 |  |  | 2014 |
Pro forma revenue |  | $ | 612,649 |  |  | $ | 618,119 |
Pro forma income (loss) from continuing operations |  |  | (36,704 | ) |  |  | (7,371 | )
Pro forma net income (loss) available to common shareholders |  |  | (43,594 | ) |  |  | (13,669 | )
Earnings (loss) per common share from continuing operations: |  |  |  |  |  |  |  |
Basic -- as reported |  | $ | (0.17 | ) |  | $ | 0.04 |
Basic -- as pro forma |  | $ | (0.21 | ) |  | $ | (0.04 | )
Diluted -- as reported |  | $ | (0.17 | ) |  | $ | 0.04 |
Diluted -- as pro forma |  | $ | (0.21 | ) |  | $ | (0.04 | )
Earnings (loss) per common share: |  |  |  |  |  |  |  |
Basic -- as reported |  | $ | (0.21 | ) |  | $ | - |
Basic -- as pro forma |  | $ | (0.24 | ) |  | $ | (0.08 | )
Diluted -- as reported |  | $ | (0.21 | ) |  | $ | - |
Diluted -- as pro forma |  | $ | (0.24 | ) |  | $ | (0.08 | )
For the year ended December 31, 2014, $0.2 million of acquisition related costs are included as if the transaction occurred January 1, 2014. On April 6, 2015, the Company acquired a 0.8 acre parcel of land, located at 25 M Street Southeast, Washington, D.C. for $20.3 million. The Company funded the cost of this acquisition with available corporate funds. The Company capitalized $0.3 million of acquisition related costs and these costs are included as part of land inventory on the Company's consolidated balance sheet. On May 12, 2015, the Company subsequently contributed the land parcel into a newly formed real estate venture known as 25 M Street Holdings, LLC (“25 M Street”), a joint venture between the Company and Jaco 25 M Investors, LLC (“Akridge”), an unaffiliated third party, with the intent to construct a 271,000 square foot Class A office property. The Company holds a 95.0% ownership interest in 25 M Street and Akridge contributed $1.0 million in cash for its 5.0% ownership interest in 25 M Street. The $1.0 million contribution from Akridge was distributed to the Company during 2015. 25 M Street is consolidated within the Company's financial statements. See Note 4, "Investment in Unconsolidated Real Estate Ventures," for further information. As of December 31, 2015, 25 M Street had not finalized development plans and total development costs, or received committed debt financing. On April 2, 2015, the Company acquired, from an unaffiliated third party, a property located at 618 Market Street in Philadelphia, Pennsylvania, comprised of a 330-space parking garage and 14,404 net rentable square feet for $19.4 million. Although the property is currently fully operational, the Company intends to either redevelop the existing property or demolish and fully develop the property. As of December 31, 2015, the Company had not yet begun any such development or redevelopment plans. The purchase price includes contingent consideration, recorded at fair value and payable to the seller upon commencement of development, totaling $1.6 million, and cash of $17.8 million. The Company has treated the acquisition of 618 Market Street as a business combination and allocated the purchase price to the tangible and intangible assets. The Company utilized a number of sources in making estimates of fair values for purposes of allocating the purchase price to tangible and intangible assets acquired. The Company allocated $19.2 million to building, land and improvements and $0.2 million to intangible assets. The fair value of contingent consideration was determined using a probability weighted discounted cash flow model. The significant inputs to the discounted cash flow model were the discount rate and weighted probability scenarios. As the inputs are unobservable, the Company determined the inputs used to value this liability falls within Level 3 for fair value reporting. As of December 31, 2015, there was no significant changes to the inputs and the liability remains within Level 3 for fair value reporting. Dispositions The Company sold the following office properties, in each case to unaffiliated third parties in arms’ length transactions, during the twelve-month period ended December 31, 2015 (dollars in thousands):
Disposition Date |  | Property/Portfolio Name |  | Location |  | Number of Properties |  | Rentable Square Feet |  |  | Sales Price |  |  | Net Proceeds on Sale |  |  | Gain on Sale (a) |  |
December 31, 2015 |  | 5707 Southwest Parkway (Encino Trace) |  | Austin, TX |  | 2 |  |  | 320,000 |  |  | $ | 76,700 |  |  | $ | 50,158 |  |  | $ | 2,008 |  | (b)
December 29, 2015 |  | Laurel Corporate Center |  | Mt. Laurel, NJ |  | 6 |  |  | 560,147 |  |  |  | 56,500 |  |  |  | 56,253 |  |  |  | 2,901 |  |
December 18, 2015 |  | Carlsbad Properties |  | Carlsbad, CA |  | 3 |  |  | 196,075 |  |  |  | 30,400 |  |  |  | 29,568 |  |  |  | - |  | (c)
December 18, 2015 |  | 751-761 Fifth Ave |  | King of Prussia, PA |  | 1 |  |  | 158,000 |  |  |  | 4,600 |  |  |  | 4,245 |  |  |  | 894 |  |
September 29, 2015 |  | 1000 Howard Boulevard |  | Mt. Laurel, NJ |  | 1 |  |  | 105,312 |  |  |  | 16,500 |  |  |  | 15,780 |  |  |  | 4,828 |  |
August 13, 2015 |  | Bay Colony Office Park |  | Wayne, PA |  | 4 |  |  | 247,294 |  |  |  | 37,500 |  |  |  | 36,386 |  |  |  | 269 |  |
August 11, 2015 |  | 741 First Avenue |  | King of Prussia, PA |  | 1 |  |  | 77,184 |  |  |  | 4,900 |  |  |  | 4,640 |  |  |  | 372 |  |
June 10, 2015 |  | 100 Gateway Centre Parkway |  | Richmond, VA |  | 1 |  |  | 74,991 |  |  |  | 4,100 |  |  |  | 3,911 |  |  |  | - |  | (d)
April 24, 2015 |  | Christina & Delaware Corporate Centers |  | Wilmington, DE |  | 5 |  |  | 485,182 |  |  |  | 50,100 |  |  |  | 49,579 |  |  |  | 1,749 |  |
April 9, 2015 |  | Lake Merritt Tower |  | Oakland, CA |  | 1 |  |  | 204,336 |  |  |  | 65,000 |  |  |  | 62,800 |  |  |  | - |  | (e)
January 8, 2015 |  | 1000 Atrium Way / 457 Haddonfield Road (Atrium I / Libertyview) |  | Mt. Laurel, NJ / Cherry Hill, NJ |  | 2 |  |  | 221,405 |  |  |  | 28,300 |  |  |  | 26,778 |  |  |  | 8,981 |  |
Total Dispositions |  |  |  |  |  | 27 |  |  | 2,649,926 |  |  | $ | 374,600 |  |  | $ | 340,098 |  |  | $ | 22,002 |  | (f)
| (a) | Gain on Sale is net of closing and other transaction related costs.
| (b) | On December 31, 2015, the Company contributed two newly constructed four-story, Class A office buildings, commonly known as “Encino Trace,” containing an aggregate of approximately 320,000 square feet in Austin, Texas to one of its existing real estate ventures (the “Austin Venture”) that the Company formed in 2013 with G&I VII Austin Office LLC, an investment vehicle advised by DRA Advisors LLC (“DRA”). When these two properties were contributed to the Austin Venture the Company had incurred a total of $76.7 million of development costs, representing the contribution value. The project is expected to cost $91.3 million with remaining costs fully funded by the Austin Venture. In conjunction with the contribution: (i) the Austin Venture obtained a $30.0 million mortgage loan; (ii) DRA contributed $25.1 million in net cash to the capital of the Austin Venture, including a $1.8 million working capital contribution; and (iii) the Austin Venture distributed $50.2 million to the Company and credited the Company with a $23.3 million capital contribution to the Austin Venture. In addition to the contribution of the properties, the Company also made a $1.8 million cash contribution to the Austin Venture for working capital. The Company recognized a $2.0 million gain on the contribution. Under the Encino Trace loan agreement the Austin Venture has the option, subject to certain leasing and loan-to-value requirements, to borrow an additional $29.7 million to fund tenant improvements and leasing commissions.
| (c) | The Company recorded an impairment loss of $6.3 million for the Carlsbad office properties during the fourth quarter of 2015. As such, there was no gain at disposition for this property.
| (d) | The Company recorded an impairment loss of $0.8 million for 100 Gateway Centre Parkway during the second quarter of 2015. As such, there was no gain at disposition for this property.
| (e) | The Company recorded an impairment loss of $1.7 million for Lake Merritt Tower at March 31, 2015. As such, there was no gain at disposition for this property. Sales proceeds were deposited in escrow under Section 1031 of the Internal Revenue Code and applied to purchase the Broadmoor Austin portfolio. Refer to Broadmoor Austin Associates acquisition summary, above, for further details.
| (f) | Total gain on sale does not include a deferred gain of $0.5 million related to a prior sale.
The Company sold the following land parcels, in each case to unaffiliated third parties in arms’ length transactions, during the twelve-month period ended December 31, 2015 (dollars in thousands):
Disposition Date |  | Property/Portfolio Name |  | Location |  | Number of Parcels |  |  | Acres |  |  | Sales Price |  |  | Net Proceeds on Sale |  |  | Gain/(Loss) on Sale (a) |  |
December 18, 2015 |  | Two Christina Centre |  | Wilmington, DE |  | 1 |  |  | 1.6 |  |  | $ | 6,500 |  |  | $ | 5,986 |  |  | $ | - |  | (b)
September 1, 2015 |  | 7000 Midlantic |  | Mt. Laurel, NJ |  |  | 1 |  |  |  | 3.5 |  |  |  | 2,200 |  |  |  | 1,742 |  |  |  | (169 | ) |
August 31, 2015 |  | Four Points |  | Austin, TX |  |  | 1 |  |  |  | 8.6 |  |  |  | 2,500 |  |  |  | 2,344 |  |  |  | 71 |  |
August 25, 2015 |  | Two Kaiser Plaza |  | Oakland, CA |  |  | 1 |  |  |  | 1.0 |  |  |  | 11,100 |  |  |  | 11,016 |  |  |  | 3,117 |  |
Total Dispositions |  |  |  |  |  | 4 |  |  | 14.7 |  |  | $ | 22,300 |  |  | $ | 21,088 |  |  | $ | 3,019 |  |
| (a) | Gain/(Loss) on sale includes closing and other transaction related costs.
| (b) | The Company recorded an impairment loss of $0.3 million for Two Christina Centre during the fourth quarter of 2015. As such, there was no gain/(loss) at disposition for this land parcel.
Held for Sale The following is a summary of properties classified as held for sale but which did it not meet the criteria to be classified within discontinued operations at December 31, 2015 (in thousands):
| Held for Sale Properties Included in Continuing Operations |
| December 31, 2015 |
| Och-Ziff Properties (a) |  |  | 2970 Market Street (b) |  |  | Greenhills Land (c) |  |  | Total |
ASSETS HELD FOR SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating properties | $ | 526,099 |  |  | $ | 268,489 |  |  | $ | - |  |  | $ | 794,588 |
Accumulated depreciation |  | (179,092 | ) |  |  | (34,489 | ) |  |  | - |  |  |  | (213,581 | )
Operating real estate investments, net |  | 347,007 |  |  |  | 234,000 |  |  |  | - |  |  |  | 581,007 |
Construction-in-progress |  | 1,915 |  |  |  | 25 |  |  |  | - |  |  |  | 1,940 |
Land held for development |  | - |  |  |  | - |  |  |  | 837 |  |  |  | 837 |
Total real estate investments, net |  | 348,922 |  |  |  | 234,025 |  |  |  | 837 |  |  |  | 583,784 |
Intangible assets |  | 581 |  |  |  | - |  |  |  | - |  |  |  | 581 |
Total assets held for sale, net | $ | 349,503 |  |  | $ | 234,025 |  |  | $ | 837 |  |  | $ | 584,365 |
LIABILITIES HELD FOR SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquired lease intangibles, net | $ | 192 |  |  | $ | - |  |  | $ | - |  |  | $ | 192 |
Other liabilities |  | 1,959 |  |  |  | - |  |  |  | - |  |  |  | 1,959 |
Total liabilities held for sale | $ | 2,151 |  |  | $ | - |  |  | $ | - |  |  | $ | 2,151 |
| (a) | On February 4, 2016, the Company disposed of its interests in 58 properties located in the Pennsylvania Suburbs, New Jersey/Delaware, Metropolitan Washington, D.C. and Richmond, Virginia segments in a series of related transactions with Och Ziff Real Estate. During the fourth quarter of 2015, significant provisions were agreed upon by both the Company and Och Ziff Real Estate and, as a result, the Company determined that the sale of the portfolio was probable and classified these properties as held for sale in accordance with applicable accounting standards for long lived assets. At such date, the carrying value of the properties exceeded the fair value less the anticipated costs of sale. As a result, the Company recognized an impairment loss totaling approximately $45.4 million during the year ended December 31, 2015. The fair value measurement was based on the pricing in the purchase and sale agreement. As the significant inputs to the model are unobservable, the Company determined that the value determined for these real estate investments fall within Level 3 for fair value reporting.
| (b) | On December 23, 2015 the Company entered into a purchase and sale agreement to dispose of its equity interests in the office property located at 2970 Market Street in Philadelphia commonly known as 30th Street Main Post Office (“Cira Square”), which includes 862,692 square feet of rentable space and is fully leased to a single tenant. As of December 31, 2015, the Company determined the sale was probable and classified the property as held for sale in accordance with applicable accounting standards for long lived assets. As the fair value less anticipated costs to sell exceeded the carrying value of the property no impairment loss was recorded. The fair value measurement was based on the pricing in the purchase and sale agreement. As the sales price is unobservable, the Company determined that the significant inputs used to value this real estate investment falls within Level 3 for fair value reporting. On February 5, 2016 the Company completed the disposition of its equity interests in Cira Square.
| (c) | On January 15, 2016, the Company sold the fee interest in a 120 acre land parcel located in Berks County, Pennsylvania for $0.9 million. As of December 31, 2015, the Company classified this land parcel as held for sale in accordance with the applicable accounting standards for long lived assets. At such date, the carrying value of the properties exceeded the fair value less the anticipated costs of sale. As a result, the Company recognized an impairment loss totaling approximately $0.3 million during the year ended December 31, 2015.
The sales of the Company’s equity interests and the fee interests in the properties referenced above do not represent a strategic shift that has a major effect on the Company's operations and financial results. As a result, the operating results of these properties remain classified within continuing operations for all periods presented. See Note 21, "Subsequent Events," for further information regarding these dispositions. Held for Use Impairment As of December 31, 2015, the Company evaluated the recoverability of the carrying value of its properties under the undiscounted cash flow model. Based on the analysis, it was determined that due to deteriorating operating results, increased market vacancy and a reduction in management’s intended hold period, the Company would not recover the carrying value of three properties located in the Company’s Metropolitan D.C. segment. Accordingly, the Company recorded an impairment charge of $27.5 million at December 31, 2015 reducing the aggregate carrying values of these properties from $40.4 million to their estimated fair values of $12.9 million. The Company determined these impairments based on a discounted cash flow analysis, using a hold period of 10 years and residual capitalization rates and discount rates of 8.0%. The results were compared to indicative pricing in the market. The assumptions used to determine fair value are Level 3 inputs, respectively, in accordance with the fair value hierarchy established by Accounting Standards Codification (ASC) Topic 820, "Fair Value Measurements and Disclosures.” 2014 Acquisitions The Company completed each of the transactions described below with unaffiliated third parties in arms’ length transactions. On February 19, 2014, the Company acquired 54.1 acres of undeveloped land known as Encino Trace in Austin, Texas for $14.0 million. The land is fully entitled with a site plan and building permits in place allowing for the development of two four-story office buildings containing approximately 320,000 net rentable square feet. The purchase price included an in-place lease for 75% of the first building. The Company capitalized $8.4 million in construction in progress, recorded $4.6 million in land inventory and recorded a deposit for a portion of the future development fee held in escrow of $1.0 million. The Company funded the acquisition with available corporate funds. As of December 31, 2014, each of the two office buildings at Encino Trace was in development, and the Company had funded, through such date, $38.8 million, inclusive of the $14.0 million acquisition cost. During the second quarter of 2014, the Company reclassified the $4.6 million remaining in land inventory to construction in progress in connection with commencement of development of the second building. Dispositions The Company sold the following office properties, in each case to unaffiliated third parties in arms’ length transactions, during the twelve-month period ended December 31, 2014 (dollars in thousands):
Disposition Date |  | Property/Portfolio Name |  | Location |  | Number of Properties |  | Rentable Square Feet |  |  | Sales Price |  |  | Net Proceeds on Sale |  |  | Gain/(Loss) on Sale (a) |  |
October 24, 2014 |  | 100, 101, 200, 300 and 301 Lindenwood Drive (the Valleybrooke Properties) |  | Malvern, PA |  | 5 |  |  | 279,934 |  |  | $ | 37,900 |  |  | $ | 37,156 |  |  | $ | 203 |  | (b)
September 30, 2014 |  | 1880 Campus Commons Drive (Campus Pointe) |  | Reston, VA |  | 1 |  |  | 172,943 |  |  |  | 42,500 |  |  |  | 41,476 |  |  |  | 4,698 |  |
April 3, 2014 |  | 11305 Four Points Drive (Four Points Centre) (c) |  | Austin, TX |  | 2 |  |  | 192,396 |  |  |  | 20,750 |  |  |  | 34,392 |  |  |  | (255 | ) | (c)
Total Dispositions |  |  |  |  |  | 8 |  |  | 645,273 |  |  | $ | 101,150 |  |  | $ | 113,024 |  |  | $ | 4,646 |  |
| (a) | Gain/(Loss) on sale is net of closing and other transaction related costs.
| (b) | During the third quarter of 2014, the Company recorded a $1.8 million impairment loss on these properties.
| (c) | On April 3, 2014, the Company contributed two three-story, Class A office buildings, commonly known as “Four Points Centre,” containing an aggregate of approximately 192,396 net rentable square feet in Austin, Texas to an existing real estate venture (the “Austin Venture”) that the Company formed in 2013 with G&I VII Austin Office LLC, an investment vehicle advised by DRA Advisors LLC (“DRA”). The Company contributed the properties to the Austin Venture at an agreed upon value of $41.5 million. In conjunction with the contribution: (i) the Austin Venture obtained a $29.0 million mortgage loan; (ii) DRA contributed $5.9 million in net cash to the capital of the Austin Venture; and (iii) the Austin Venture distributed $34.4 million to the Company and credited the Company with a $5.9 million capital contribution to the Austin Venture. The Company incurred a $0.2 million loss on the contribution, driven primarily by closing costs.
The Company sold the following land parcels, in each case to unaffiliated third parties in arms’ length negotiations, during the twelve-month period ended December 31, 2014 (dollars in thousands):
Disposition Date |  | Property/Portfolio Name |  | Location |  | Number of Parcels |  |  | Acres |  |  | Sales Price |  |  | Net Proceeds on Sale |  |  | Gain on Sale (a) |
April 16, 2014 |  | Westpoint II Land |  | Dallas, TX |  | 1 |  |  | 5.3 |  |  | $ | 1,600 |  |  | $ | 1,505 |  |  | $ | 12 |
March 27, 2014 |  | Rob Roy Land |  | Austin, TX |  |  | 1 |  |  |  | 16.8 |  |  |  | 3,520 |  |  |  | 3,350 |  |  |  | 1,172 |
Total Dispositions |  |  |  |  |  | 2 |  |  | 22.1 |  |  | $ | 5,120 |  |  | $ | 4,855 |  |  | $ | 1,184 |
| (a) | Gain/(Loss) on Sale is net of closing and other transaction related costs.
Held for Sale Subsequent to December 31, 2014, the Company sold two office properties, commonly known as “Atrium I,” which includes 99,668 square feet of rentable space located in Mt Laurel, New Jersey and “Libertyview,” which includes 121,737 square feet of rentable space located in Cherry Hill, New Jersey. As of December 31, 2014, the Company classified Atrium I and Libertyview as held for sale in accordance with applicable accounting standard for long lived assets. Accordingly, at December 31, 2014, the properties were required to be measured at the lower of their carrying value or the estimated fair value less costs to sell. No provision for impairment was recognized at December 31, 2014, as the estimated fair value of the properties (based on the executed agreement in place at December 31, 2014) less costs to sell exceeded the carrying value of the properties. The disposal of the properties referenced above does not represent a strategic shift that has a major effect on the Company’s operations and financial results. Accordingly, the operating results of these properties remain classified within continuing operations for all periods presented.

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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 946 -SubTopic 210 -Section S99 -Paragraph 3 -Subparagraph (SX 210.6-06(1)) -URI http://asc.fasb.org/extlink&oid=6488278&loc=d3e604059-122996 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03(a)(1)(d)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04(c)(Schedule III)) -URI http://asc.fasb.org/extlink&oid=27047687&loc=d3e5864-122674 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -SubTopic 360 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-28) -URI http://asc.fasb.org/extlink&oid=6590653&loc=d3e638233-123024 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03(10)(4)) -URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 235 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-24) -URI http://asc.fasb.org/extlink&oid=34714203&loc=d3e608456-123001 + Details
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