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Dispositions of Property

12 Months Ended

Dec. 31, 2024

Dispositions of Property

Dispositions of Property

10. Dispositions of Property

In 2024, the Company sold an office property located in Richardson, Texas on January 26, 2024, for a gross sales price of $35 million. The property was classified as held for sale as of December 31, 2023, and an impairment of $2.1 million had been recorded during the year ended December 31, 2023. An additional $5,000 of costs related to the sale were recorded during the three months ended March 31, 2024. During the three months ended June 30, 2024, the Company entered into an agreement to sell a property in Glen Allen, Virginia for a gross sales price of approximately $31.0 million and an expected loss of $13.2 million, which was recorded as an impairment. The property was sold on July 8, 2024, at the expected loss. During the three months ended September 30, 2024, the Company recorded an additional $0.7 million in costs related to the sale of properties previously sold. During the three months ended September 30, 2024, the Company entered into an agreement to sell a property in Atlanta, Georgia, which was classified as an asset held for sale during 2023. The Company increased the expected loss on this property by $6.6 million to $27.2 million when the Company entered into this new agreement to sell the property for a gross sales price of $34.0 million. The property sold on October 23, 2024, with a $0.4 million increase to loss from final sales adjustments on the date of sale.

In 2023, the Company sold one office property located in Elk Grove, Illinois on March 10, 2023, for a gross sales price of $29.1 million, at a gain of approximately $8.4 million. The Company used the proceeds of the disposition principally to repay a portion of outstanding indebtedness. The Company sold one office property located in Charlotte, North Carolina on August 9, 2023 for a gross sales price of $9.2 million, at a loss of $0.8 million. During the three months ended September 30, 2023, the Company recorded a gain on sale of $53,000 as a result of conveying approximately

7,826 square feet of land at the Company’s Addison, Texas property to the Town of Addison as part of a road revitalization project.

During the three months ended September 30, 2023, the Company reclassified $96.4 million of its office properties in Miami, Florida and Atlanta, Georgia as assets held for sale as of September 30, 2023. The Company recorded these properties at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment of $39.7 million in the three months ended September 30, 2023. The reclassification was a non-cash investing activity on the statement of cash flows. The Company estimated the fair value of these properties, less estimated costs to sell, using the offers to purchase the properties made by third parties (Level 3 inputs, as there is no active market).

During the three months ended September 30, 2023, the Company entered into an agreement to sell a property in Plano, Texas for a gross sales price of approximately $48.0 million, at an expected gain of $10.6 million. The Company reclassified $36.2 million of this office property as an asset held for sale as of September 30, 2023. The reclassification was a non-cash investing activity on the statement of cash flows. On October 26, 2023, the Company completed the sale of the property located in Plano, Texas for a gross sales price of $48.0 million at a gain of approximately $10.6 million. On December 6, 2023, the Company sold another of the assets held for sale, an office property located in Miami, Florida for a sales price of $68.0 million at a loss of approximately $18.9 million.

The asset held for sale located in Atlanta, Georgia, was expected to sell for a gross sales price of $40.0 million at a loss of approximately $20.5 million, which was recorded as an impairment as of September 30, 2023, however on November 15, 2023, the Company received notice from the buyer indicating that the buyer was terminating the transaction and directing the deposit and interest be disbursed to the Company. At December 31, 2023, the office property remained classified on the consolidated balance sheet as an asset held for sale in the amount of $39.0 million and was comprised of $52.2 million of real estate assets, net of accumulated depreciation, $4.4 million of straight-line rents receivable, and $2.9 million of deferred leasing commissions, net of accumulated amortization. The Company expects the property will be sold within the next twelve months.

During the three months ended September 30, 2023, the Company entered into a purchase and sale agreement, which was subsequently amended, to sell a property located in Richardson, Texas for a gross sales price of $35.0 million. During the three months ended December 31, 2023, the Company recorded this property at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment of $2.1 million. The Company reclassified $34.4 million of this office property as an asset held for sale, which comprised of $31.1 million in real estate assets, net of accumulated depreciation, $3.4 million in straight-line rents receivable, and $2.0 million in deferred leasing commissions, net of accumulated amortization.

In 2022, the Company sold two office properties located in Broomfield, Colorado on August 31, 2022 for an aggregate gross sales price of $102.5 million, at a gain of approximately $24.1 million. The Company sold an office property located in Evanston, Illinois on December 28, 2022 for a sales price of $27.8 million, at a gain of approximately $3.9 million. The Company used the proceeds of the dispositions principally to repay outstanding indebtedness.

The Company concluded the dispositions did not represent a strategic shift and reports the results of operations of its properties in its consolidated statements of operations, which includes rental income, rental operating expenses, real estate taxes and insurance and depreciation and amortization.

The operating results for the properties that the Company disposed of or classified as assets held for sale are summarized below:



		Year ended December 31,
(in thousands)		2024			2023			2022
Rental revenue		$	7,319		$	29,837		$	45,762
Rental operating expenses			(2,988)			(9,773)			(14,684)
Real estate taxes and insurance			(324)			(4,316)			(10,449)
Depreciation and amortization			(832)			(8,599)			(16,114)
Income from dispositions and assets held for sale		$	3,175		$	7,149		$	4,515