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Real Estate Dispositions, Held for Sale, and Impairment Charges | 12 Months Ended
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Dec. 31, 2017
Real Estate [Abstract] |
Real Estate Dispositions, Held for Sale, and Impairment Charges | Real Estate Dispositions, Held for Sale, and Impairment Charges Real Estate Dispositions During the year ended December 31, 2017, we continued to execute our capital recycling program, whereby we sold properties outside of our core markets and redeployed proceeds to either fund property acquisitions in our target secondary growth markets, or repay outstanding debt. We expect to continue to execute our capital recycling plan and sell non-core properties as reasonable disposition opportunities become available. During the year ended December 31, 2017, we sold four non-core properties and applied the proceeds towards outstanding debt and property acquisitions, which is summarized in the table below (dollars in thousands):
Aggregate Square Footage Sold |  | Aggregate Sales Price |  | Aggregate Sales Costs |  | Aggregate Impairment Charge for the Twelve Months Ended December 3 1, 2017 |  | Aggregate Gain on Sale of Real Estate, net
593,763 |  |  | $ | 30,302 |  |  | $ | 803 |  |  | $ | 3,999 |  |  | $ | 3,993 |
Our 2017 dispositions were not classified as discontinued operations because they do not represent a strategic shift in operations, nor will they have a major effect on our operations and financial results. Accordingly, the results of these properties are included within continuing operations for all periods reported. The table below summarizes the components of operating income from the real estate and related assets disposed of during the years ended December 31, 2017, 2016, and 2015, respectively (dollars in thousands):
|  | For the year ended December 31,
|  | 2017 |  | 2016 |  | 2015
Operating revenue |  | $ | 1,280 |  |  | $ | 2,569 |  |  | $ | 2,958 |
Operating expense |  | 4,449 |  | (1) | 1,883 |  |  | 1,192 |
Other income (expense), net |  | 3,831 |  | (2) | (403 | ) |  | (922 | )
Income from real estate and related assets sold |  | $ | 662 |  |  | $ | 283 |  |  | $ | 844 |
(1) Includes $4.0 million impairment charge (2) Includes $4.0 million gain on sale of real estate, net Real Estate Held for Sale At December 31, 2017, we had two properties classified as held for sale, located in Arlington, Texas, and Tewksbury, Massachusetts. We considered both assets to be non-core to our long term strategy. Both of these properties are under contract to sell, and we anticipate both sales will be completed during the first quarter of 2018. At December 31, 2016, we had two properties classified as held for sale, located in Franklin Township, New Jersey, and Hazelwood, Missouri. Both of these properties were sold during the year ended December 31, 2017. Our assets classified as held for sale at December 31, 2017 were not classified as discontinued operations because they do not represent a strategic shift in our operations, nor will they have a major effect on our operations and financial results. The table below summarizes the components of income from real estate and related assets held for sale at December 31, 2017 (dollars in thousands):
|  | For the year ended December 31,
|  | 2017 |  | 2016 |  | 2015
Operating revenue |  | $ | 872 |  |  | $ | 1,121 |  |  | $ | 1,121 |
Operating expense |  | 3,538 |  | (1) | 556 |  |  | 559 |
Other income, net |  | — |  |  | (158 | ) |  | (232 | )
(Loss) income from real estate and related assets held for sale |  | $ | (2,666 | ) |  | $ | 407 |  |  | $ | 330 |
(1) Includes $2.8 million impairment charge The table below summarizes the components of the assets and liabilities held for sale reflected on the accompanying consolidated balance sheet (dollars in thousands):
|  | December 31, 2017 |  | December 31, 2016
Assets Held for Sale |  |  |  |
Real estate, at cost |  | $ | 12,997 |  |  | $ | 11,454 |
Less: accumulated depreciation |  | 3,970 |  |  | 2,668 |
Total real estate held for sale, net |  | 9,027 |  |  | 8,786 |
Lease intangibles, net |  | 9 |  |  | 200 |
Deferred rent receivable, net |  | 10 |  |  | 575 |
Other assets |  | — |  |  | 1 |
Total Assets Held for Sale |  | $ | 9,046 |  |  | $ | 9,562 |
Liabilities Held for Sale |  |  |  |
Deferred rent liability, net |  | $ | — |  |  | $ | 755 |
Asset retirement obligation |  | 114 |  |  | 286 |
Total Liabilities Held for Sale |  | $ | 114 |  |  | $ | 1,041 |
Impairment Charges We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the year ended December 31, 2017 and identified two held and used assets which were impaired during the first quarter of 2017. We did not identify any impairment on held and used assets during any other quarter of 2017. For these properties, during first quarter 2017, we received unsolicited interest from potential buyers, and as a result, we included a sale scenario and shortened our hold period when comparing the undiscounted cash flows against the respective carrying values. Based upon our analysis, we concluded that the undiscounted cash flows for these properties were below their respective carrying values indicating that these assets were impaired as of March 31, 2017, and accordingly, we recorded an impairment charge of $3.7 million during the three months ended March 31, 2017. During the three months ended June 30, 2017, we sold one of these impaired properties to the tenant for a further loss on sale of $1.8 million, which is included in gain on sale of real estate, net on the consolidated statements of operations and comprehensive income. During the second quarter of 2017, we became aware of a decline in the tenant's financial results. The tenant expressed interest in acquiring our property as part of their corporate reorganization. Due to the re-tenanting risk of a vacant property and the non-core market location, we executed a sale with the tenant. We sold the other impaired property during the three months ended September 30, 2017, recognizing a gain on sale of $1,000. We performed the same analysis on our held and used assets during the year ended December 31, 2016, and concluded none of these held and used assets were impaired. In connection with our held for sale process, we perform an analysis of all properties classified as held for sale at various points during the year ended December 31, 2017, and compare the fair market value of the asset less selling costs against the carrying value of assets available for sale. As a result of this analysis, we recorded aggregate impairment charges of $3.1 million on two properties classified as held for sale during various points during the year ended December 31, 2017. One of the impaired properties was sold during the third quarter of 2017, and the other is currently under contract to sell, with a sale expected to be completed during the first quarter of 2018. We recognized $2.0 million of impairment charges on seven properties during the year ended December 31, 2016. Five of these properties were sold during the year ended December 31, 2016, one property was classified as held for sale on our consolidated balance sheet at December 31, 2016, and one property was classified as held and used at December 31, 2016. We recorded the held and used asset at fair market value, as the fair market value was less than the carrying value of assets available for sale. We recognized $0.6 million of impairment charges on one property during the year ended December 31, 2015. This property was classified as held for sale during the year ended December 31, 2015, and through our held for sale analysis, we concluded that the fair market value less selling costs was below the carrying value of this property. This property was sold in May 2016. The fair values for the above properties were calculated using Level 3 inputs which were calculated using an estimated sales price, less estimated costs to sell. The estimated sales price was determined using executed purchase and sale agreements.

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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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