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SALE AND DISPOSAL OF PROPERTIES, DISCONTINUED OPERATIONS AND IMPAIRMENT
 12 Months Ended
Dec. 31, 2015
SALE AND DISPOSAL OF PROPERTIES, DISCONTINUED OPERATIONS AND IMPAIRMENT  
SALE AND DISPOSAL OF PROPERTIES, DISCONTINUED OPERATIONS AND IMPAIRMENT

NOTE 4—SALE AND DISPOSAL OF PROPERTIES, DISCONTINUED OPERATIONS AND IMPAIRMENT

Sales of Properties

        On January 13, 2015, a consolidated joint venture of the Company sold a property located in Cherry Hill, New Jersey for $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 year ended December 31, 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. At December 31, 2014, the Company classified the net book value of the property's land, building and building improvements of $10,176,000 as Properties held-for-sale and the unbilled rent receivable of $120,000 related to this property is included in Unbilled rent receivable in the accompanying consolidated balance sheet.

        On October 15, 2014, the Company sold a property located in Parsippany, New Jersey for $38,611,000, net of closing costs, and the write-off of unbilled rent receivable, resulting in a gain of $10,180,000, which is recorded as Gain on sale of real estate, net, for the year ended December 31, 2014. In connection with the sale, the Company paid off the $13,417,000 mortgage on this property. Additionally, the Company incurred a $1,581,000 mortgage prepayment charge, which is recorded as Prepayment costs on debt for the year ended December 31, 2014.

        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 loss representing the loss on the sale of these properties.

Discontinued Operations

        As of January 1, 2014, the Company adopted ASU 2014-08 which raises the threshold for disposals to qualify as discontinued operations. Accordingly, the properties sold in January 2015 and October 2014 are not considered discontinued operations. The following summarizes the components of income from discontinued operations which includes the two properties sold in February 2014 (amounts in thousands):

                                                                                                                                                                                    

 

 

Year Ended
December 31,

 

 

 

2014

 

2013

 

Rental income

 

$
141

 

$
973

 

​

​

​  

​  

​

​  

​  

​

Depreciation and amortization

 

 

—

 

 
125

 

Real estate expenses

 

 
17

 

 
12

 

Interest expense

 

 
111

 

 
259

 

​

​

​  

​  

​

​  

​  

​

Total expenses

 

 
128

 

 
396

 

​

​

​  

​  

​

​  

​  

​

Income from operations

 

 
13

 

 
577

 

Impairment loss

 

 

—

 

 
(62

)

​

​

​  

​  

​

​  

​  

​

Income from discontinued operations

 

$
13

 

$
515

 

​

​

​  

​  

​

​  

​  

​

​

​

​  

​  

​

​  

​  

​

Properties Held-for-Sale

        During 2015, the Company entered into a contract to sell a portfolio of eight retail properties located in Louisiana and Mississippi, which were sold on February 1, 2016 for a total sales price of $13,750,000. At December 31, 2015, the Company classified the $12,259,000 net book value of the properties' land and buildings as Properties held-for-sale and the unbilled rent receivable of $712,000 related to these properties is included in Unbilled rent receivable in the accompanying consolidated balance sheet. The sale resulted in a gain of approximately $785,000, which will be included in Gain on sale of real estate, net for the three months ending March 31, 2016. In connection with the sale, the Company paid off the $7,800,000 mortgage balance on these properties and incurred a $380,000 expense for the early termination of the mortgage which will be reported as Prepayment costs on debt in the three months ended March 31, 2016.

Impairment of Property

        During the year ended December 31, 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 loss of $1,093,000 which is included in the accompanying consolidated statement of income for the year ended December 31, 2014. The property was acquired by the mortgagee on January 6, 2015 through a foreclosure proceeding. At December 31, 2014, the adjusted net book value of the property was $1,470,000.