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Real Estate Transactions | 12 Months Ended
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Dec. 31, 2016
Real Estate Transactions [Abstract] |
Real Estate Transactions | NOTE 4 – Real Estate Transactions Discussed below are the real estate transactions impacting the presentation in our consolidated balance sheets as of December 31, 2016 and 2015, and the profitability determination in our consolidated statements of operations for the three years ended December 31, 2016: Purchase of New Corporate Headquarters Building in Los Angeles On April 11, 2016, we purchas ed a 24,000 square foot office building with 72 parking spaces located at 5995 Sepulveda Boulevard in Culver City, California (a Los Angeles suburb) for $11.2 million. The terms and circumstances of this acquisition were not considered to meet the definition of a business combination in accordance with US GAAP. We intend to use approximately 50% of the leasable area for our headquarters offices and to lease the remainder overtime to unaffiliated third parties. Sale of Landholding in Burwood, Australia On May 12, 2014, we entered into a contract to sell our undeveloped 50.6 acre parcel in Burwood, Victoria, Australia, to an affiliate of Australand Holdings Limited (now known as Frasers Property Australia) for a purchase price of $48.2 million (AU$65.0 million). We received $5.9 million (AU$6.5 million) on May 23, 2014. The remaining purchase price of $42.3 million (AU$58.5 million) is due on December 31, 2017. The agreement provides for mandatory pre-payments in the event that any of the land is sold by the buyer, any such prepayment being in an amount equal to the greater of (a) 90% of the net sales price or (b) the balance of the purchase price multiplied by a fraction the numerator of which is the square footage of property being sold by the buyer and the denominator of which is the original square footage of the property being sold to the buyer. The agreement does not provide for the payment of interest on the balance owed. Our book value in the property is $37.7 million (AU$52.1 million) and while the transaction was treated as a current sale for tax purposes in 2014, it does not qualify as a sale under US GAAP until the receipt of the payment of the balance of the purchase price due on December 31, 2017 (or earlier depending upon whether any prepayment obligation is triggered). The asset is classified as land held for sale – current and land held for sale – non-current on the consolidated balance sheets as of December 31, 2016 and 2015, respectively. Sale of Doheny Condo in Los Angeles On February 25, 2015, we sold our Los Angeles Condo for $3.0 million resulting in a $2.8 million gain on sale. Sale of Properties in Taupo, New Zealand On April 1, 2015, we entered into two definitive purchase and sale agreements to sell our properties in Taupo, New Zealand for a combined sales price of $2.4 million (NZ$3.4 million). The first agreement relates to a property with a sales price of $1.6 million (NZ$2.2 million) and a book value of $1.3 million (NZ$1.8 million), which closed on April 30, 2015 when we received the sales price in f ull. The other agreement related to a property with a sales price of $831,000 (NZ$1.2 million) and a book value of $426,000 (NZ$615,000) which was completed and for which we received cash settlement representing the full sales price on March 31, 2016. The first transaction qualified as a sale under both U.S. GAAP and tax purposes during the year-ended December 31, 2015. The second transaction was recorded as a sale during the quarter ended March 31, 2016. Sale of Landholding in Moonee Ponds, Australia On October 15, 2013, we entered into a definitive purchase and sale agreement to sell this property for a sales price of $17.5 million (AU$23.0 million) payable in full upon closing of the transaction on April 16, 2015. In accordance with the requirements under US GAAP, we recognized a gain of $8.0 million (AU$10.3 million) in the second quarter of 2015 upon the receipt of sale proceeds on April 16, 2015. Purchase of Property in Newmarket, Australia On November 30, 2015, we completed the purchase of an approximately 23,000 square foot parcel adjacent to our existing Newmarket shopping center in Brisbane, Australia for a total consideration of $5.5 million (AU$7.6 million). The acquired land has an existing office building which was vacant at the time of purchase completion. We intend, over time, to integrate this property into our Newmarket development thereby increasing our footprint from approximately 204,000 to 227,000 square feet. The terms and circumstances of this acquisition were not considered to meet the definition of a business combination in accordance with US GAAP. Purchase of Cannon Park ETCs in Queensland, Australia On December 23, 2015, we completed a 100% acquisition of two adjoining ETCs in Townsville, Australia for a total of $24.1 million (AU$33.4 million) in cash. The properties are located approximately 6 miles from downtown Townsville, the fourth largest city in Queensland, Australia. The total gross leasable area of the two adjoining properties, the Cannon Park City Centre and the Cannon Park Discount Centre, is 133,000 square feet. The Cannon Park City Centre is anchored by Reading Cinemas, which is operated by Reading International’s 75% owned subsidiary, Australia Country Cinemas, and has three mini-major tenants and ten specialty family oriented restaurant tenants. The Cannon Park Discount Centre is anchored by Kingpin Bowling and supported by four other retailers. This acquisition is consistent with our business plan to own, where practical, the land underlying our entertainment assets. The acquired assets consist primarily of the land and buildings, which, at the time of acquisition, was approximately 98% leased to existing tenants. Tenancies ranged from having 9 months to 8 years left to run on their leases at the time of purchase. In our assessment, we have concluded the acquired assets constitute a “business” and hence, we accounted this as a business combination. During the quarter ended September 30, 2016, the Company finalized the allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on its estimates of their fair values on the acquisition date. The acquired value components of this real estate acquisition included both tangible and intangible assets. The determination of the fair values of the acquired assets and assumed liabilities (and the related determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment. The estimates and assumptions include projected timing and amount of future cash flows and discount rates reflecting the risk inherent in the future cash flows. Typical of a real estate acquisition, there was no goodwill recorded as the purchase price did not exceed the fair value estimates o f the net acquired assets. The following table summarizes the final allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed at the date of acquisition, as well as adjustments mad e during the measurement period: ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  | Measurement |  |  |  |  |  |
﻿ |  | Preliminary Purchase Price |  | Period |  | Final Purchase Price
﻿ |  | Allocation |  | Adjustments(2) |  | Allocation
﻿(Dollars in thousands) |  | US Dollars(1) |  | AU dollars |  | AU dollars |  | US Dollars(1) |  | AU dollars
﻿Tangible Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Operating property: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Land |  | $ | 7,525 |  | $ | 10,421 |  | $ | 721 |  | $ | 8,046 |  | $ | 11,142
﻿Building and improvements |  |  | 16,588 |  |  | 22,971 |  |  | (6,453) |  |  | 11,928 |  |  | 16,518
﻿Site improvements |  |  | -- |  |  | -- |  |  | 2,321 |  |  | 1,676 |  |  | 2,321
﻿Tenant improvements |  |  | -- |  |  | -- |  |  | 957 |  |  | 691 |  |  | 957
﻿Intangible Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Above-market leases |  |  | -- |  |  | -- |  |  | 61 |  |  | 44 |  |  | 61
﻿In-place leases |  |  | -- |  |  | -- |  |  | 2,135 |  |  | 1,542 |  |  | 2,135
﻿Unamortized leasing commissions |  |  | -- |  |  | -- |  |  | 333 |  |  | 240 |  |  | 333
﻿Unamortized legal fees |  |  | -- |  |  | -- |  |  | 55 |  |  | 40 |  |  | 55
﻿Total assets acquired |  |  | 24,113 |  |  | 33,392 |  |  | 130 |  |  | 24,207 |  |  | 33,522
﻿Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Below-market leases |  |  | -- |  |  | -- |  |  | (130) |  |  | (94) |  |  | (130)
﻿Net assets acquired |  | $ | 24,113 |  | $ | 33,392 |  | $ | -- |  | $ | 24,113 |  | $ | 33,392
﻿ (1) The balances were translated into U.S. Dollars based on the applicable exchange rate as of the date of acquisition, December 23, 2015. (2) The measurement period adjustments were mainly due to the finalization of the valuations of the tangible land, building and improvements, site improvements and tenant improvements, as well as valuations of intangible assets and liabilities typically present in an acquisition of a regional mall with existing tenancies. This resulted in a reallocation of the purchase price from Building to other tangible assets (site and tenant improvements), as well as to intangible assets, including above and below market leases, in-place leases and unamortized lease origination costs. ﻿ The revenue and earnings from this acquisition, since the acquisition date as included in the consolidated statement of operations for the year ended December 31, 2015, were not significant. Based on the available information provided to us and after exhausting significant efforts to satisfy the pro-forma disclosure requirements assuming the business acquisition happened at the beginning of the year, the Company concluded it to be impracticable to determine and disclose the full-year pro forma combined revenue and earnings for 2015 and 2014.

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