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Discountinued Operations
 9 Months Ended
Sep. 30, 2012
Discontinued operations  
DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock

8. DISCONTINUED OPERATIONS

 

In the third quarter of 2012, our Board of Directors authorized us to actively market the Waterman Plaza, 7-Eleven and Casa Grande Apartments. In addition, in the normal course of the model home business, there are several model homes also actively being marketed for sale.

 

The assets, liabilities and noncontrolling interests of these properties have been classified in their respective held for sale classifications on the condensed consolidated balance sheets as of September 30, 2012 and December 31, 2011. The results of operations for these properties held for sale are presented in discontinued operations on the accompanying condensed consolidated statement of operations for the three and nine months ended September 30, 2012 and 2011.

 

The following is a summary of the components of (loss) income from discontinued operations for the three and nine months ended September 30, 2012 and 2011:

 

 Three Months Ended Nine Months Ended
 September 30, September 30,
  2012  2011  2012  2011
Rental income and other income$ 257,255 $ 258,492 $ 770,863 $ 731,767
Rental operating costs  68,573   72,704   211,898   211,641
Interest expense  60,770   59,182   183,265   185,213
Depreciation and amortization  41,687   59,079   164,285   177,261
Asset impairments  358,000   -   358,000   -
Noncontrolling interests share of earnings  25,019   17,447   62,265   42,568
(Loss) income from discontinued operations$ (296,794) $ 50,080 $ (208,850) $ 115,084
            

Assets classified as held for sale are required to be carried at the lesser of the net book value of the property or the estimated fair value less selling costs, or net realizable value. Accordingly, we recorded an impairment charge of $358,000 in the quarter ended September 30, 2012.

The following table presents balance sheet information for the properties classified as held for sale as of September 30, 2012 and December 31, 2011:

       
   September 30,  December 31,
   2012  2011
      
Assets held for sale:     
Real estate assets and lease intangibles, net$10,790,139 $14,418,673
Cash and cash equivalents 73,002  125,551
Other assets, net 188,922  192,238
       
 Assets held for sale$ 11,052,063 $ 14,736,462
       
Liabilities related to assets held for sale::     
 Mortgage notes payable$ 5,226,914 $ 6,271,008
 Accounts payable and accrued liabilities  94,407   169,867
 Liabilities related to assets held for sale:$5,321,321 $6,440,875
       
Noncontrolling interests related to assets held for sale:     
 Noncontrolling interests related to assets held for sale$1,494,288 $1,671,598