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Allowance for Doubtful Accounts
6 Months Ended
Jun. 30, 2016
Allowance for Doubtful Accounts  
Allowance for Doubtful Accounts

 

Note 9 — Allowance for Doubtful Accounts

 

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of a tenant to make required rent payments.  If the financial condition of a specific tenant were to deteriorate adversely impacting its ability to make payments, additional allowances may be required.  At June 30, 2016 and December 31, 2015, there was no balance in allowance for doubtful accounts.

 

The Company records bad debt expense as a reduction of rental income and/or tenant reimbursements. On March 2, 2016, Sports Authority Inc., the tenant at the Company’s Greenwood Village, Colorado property, filed for Chapter 11 bankruptcy protection and on June 30, 2016, such tenant vacated the property. This tenant accounted for less than 1% of the Company’s rental income for the three and six months ended June 30, 2016 and 2015.  For the three and six months ended June 30, 2016, the Company recorded an aggregate bad debt expense of $37,000 and $190,000, respectively, relating to rental income and tenant reimbursements due from this tenant.  The Company is marketing the property, which at June 30, 2016 has a net book value of $2,711,000, for sale or lease and has determined that no impairment charge is required currently with respect to this property. In July 2016, the Company received a $466,000 payment from the Colorado Department of Transportation as a deposit against any eventual settlement for the taking of approximately 5% of the land associated with this property, which includes approximately 20 parking spaces.