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REAL ESTATE ACTIVITY
 12 Months Ended
Dec. 31, 2013
REAL ESTATE ACTIVITY  
REAL ESTATE ACTIVITY

NOTE 2.         REAL ESTATE

 

Real estate consisted of the following at December 31, (dollars in thousands):

 

 

 

 

2013

 

 

2012

 

 

Mercer Crossing/Travelers Land

 

$

24,511

 

 

$

24,511

 

 

 

 

$

24,511

 

 

$

24,511

 

 

The Travelers land owned by the Company is a contiguous land parcel in Farmers Branch, TX and is part of a larger development project referred to as “Mercer Crossing”.  It is expected that this land will be developed or sold for development in the future.

 

The Company entered into a sales contract with an independent third party, for 100 acres of Travelers land for $17.5 million or $4.02/sf.  The buyer was entitled to an inspection period, which expired August 15, 2013.  The contract has not been extended at this time and requires a change in zoning in order to proceed.  The future of this sales contract is unknown.

 

Sales to our parent, TCI, have previously been reflected at the fair value sales price.   Upon discussion with the SEC and in review of the guidance pursuant to ASC 250-10-45-22 to 24, we have adjusted those asset sales, in the prior year, to reflect a sales price equal to the cost basis in the asset at the time of the sale.  The related party payables from TCI were reduced for the lower asset price.

 

There were no significant real estate acquisitions or sales that closed for the year ended December 31, 2013.

 

Concentration of investment risk.    IOT has a high concentration of investment risk on properties in the southwest region of the United States, specifically Texas. This risk includes, but is not limited to, changes in local economic conditions, changes in real estate and zoning laws, increases in real estate taxes, floods, tornados and other acts of God and other factors beyond the control of management. In the opinion of management, this investment risk is partially mitigated by the diversification of property types in other geographical regions of the United States, management’s review of additional investments, acquisitions in other areas and by insurance.