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Discontinued Operations
 12 Months Ended
Dec. 31, 2011
Discontinued Operations.  
Discontinued Operations

11.   Discontinued Operations

 

In December 2011, the Company discontinued the activities of the investment banking segment.  The Company also classifies properties sold or held for sale as discontinued operations.

 

The Company sold an industrial property located in Savage, Maryland on June 24, 2011 and in 2010 reached an agreement to sell a commercial property, located in Falls Church, Virginia, which was sold on January 21, 2011.  Both properties were sold at gains.  The Falls Church, Virginia property was classified as an asset held for sale at December 31, 2010.  Accordingly, the property was classified as discontinued for all periods presented.  The Company also recognized a gain on a small piece of land as a result of a land taking of approximately $424,000 during the year ended December 31, 2009.

 

The assets held for sale are summarized below:

 

 

 

December 31,

 

(in thousands)

 

2010

 

 

 

 

 

Land

 

$

13,355

 

Building

 

54,708

 

 

 

68,063

 

Less accumulated depreciation

 

2,824

 

 

 

65,239

 

Straight-line rent receivable

 

658

 

Deferred leasing comissions, net of accumulated amortization of $200

 

79

 

Acquired real estate leases and unfavorable real estate leases, less accumulated amortization of $1,844

 

8,971

 

 

 

$

74,947

 

 

The Company reports the results of operations of its properties classified as discontinued operations in its consolidated statements of income, which includes rental income, rental operating expenses, real estate taxes and insurance, depreciation and amortization.  In addition, in December 2011, the Company announced it would no longer sponsor the syndication of newly-formed Sponsored REITs and cash flows related to this activity will be eliminated from ongoing operations.  Accordingly, the Company reported the investment banking activities as discontinued operations in its consolidated statements of income, which includes syndication and transaction fee revenues, selling, general and administrative expenses, commission expenses, depreciation and amortization, interest income and income tax benefits.  Selling, general and administrative expenses include $378,000 of severance costs and professional fees related to discontinuing investment banking activities.  The assets of the investment banking segment included in the consolidated balance sheet at December 31, 2011 and 2010 is zero and $3.0 million, respectfully, related to assets held for syndications, net.

 

The operating results for discontinued operations are summarized below.

 

 

 

For the Year Ended

 

 

 

December 31,

 

(in thousands)

 

2011

 

2010

 

2009

 

Rental revenue

 

$

689

 

$

8,748

 

$

2,732

 

Related party revenue:

 

 

 

 

 

 

 

Syndication fees

 

4,670

 

2,544

 

2,428

 

Transaction fees

 

4,454

 

2,727

 

2,080

 

Other income

 

42

 

—

 

—

 

Rental operating expenses

 

(5

)

(73

)

(16

)

Real estate taxes and insurance

 

(56

)

(1,008

)

(712

)

Selling, general and administrative

 

(3,430

)

(2,887

)

(4,062

)

Commissions

 

(2,535

)

(1,477

)

(1,801

)

Depreciation and amortization

 

(238

)

(3,207

)

(989

)

Income tax benefit

 

—

 

—

 

827

 

Interest income

 

14

 

1

 

4

 

Net income from discontinued operations

 

$

3,605

 

$

5,368

 

$

491