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Sale and Disposal of Properties, Discontinued Operations and Impairment
 9 Months Ended
Sep. 30, 2015
Sale and Disposal of Properties, Discontinued Operations and Impairment  
Sale and Disposal of Properties, Discontinued Operations and Impairment

 

Note 5 — Sale and Disposal of Properties, Discontinued Operations and Impairment

 

On January 13, 2015, a consolidated joint venture of the Company sold a property located in Cherry Hill, New Jersey for approximately $16,025,000, net of closing costs.  The sale resulted in a gain of $5,392,000, recorded as Gain on sale of real estate, net, for the nine months ended September 30, 2015. In connection with the sale, the Company paid off the $7,376,000 mortgage balance on this property and incurred a $472,000 swap termination fee (included in Prepayment costs on debt) and a $249,000 write-off of deferred financing costs (included in Amortization and write-off of deferred financing costs). The non-controlling interest’s share of income from the transaction is $1,320,000 and is included in net income attributable to non-controlling interests.

 

On February 3, 2014, the Company sold two properties located in Michigan for a total sales price of $5,177,000, net of closing costs.  At December 31, 2013, the Company recorded a $61,700 impairment charge representing the loss on the sale of these properties. Income from discontinued operations applicable to these properties for the nine months ended September 30, 2014 totaled $13,000 consisting of rental income of $141,000 less real estate expenses of $17,000 and mortgage interest of $111,000.

 

During the three and nine months ended September 30, 2014, the Company determined there were indicators of impairment at its property located in Morrow, Georgia.  The tenant did not renew the lease which expired October 31, 2014, efforts to re-let the property were unsuccessful and the non-recourse mortgage on the property matured on November 1, 2014. Management determined that the undiscounted cash flows in the test for recoverability were less than the property’s carrying amount, and that the fair value of the property was less than its carrying amount.  Accordingly, the Company recorded an impairment charge of $1,093,000 which is included in the accompanying consolidated statement of income for the three and nine months ended September 30, 2014.  The property was acquired by the mortgagee on January 6, 2015 through a foreclosure proceeding.