Note 3. Real Estate

Real estate activity for 2014 and 2013 is comprised of the following:


	Years ended December 31,
	2014	2013
Cost
Balance, beginning of year	$ 1,450,951,000	$ 1,423,979,000
Properties held for sale	(81,223,000)	-
Property acquired	91,241,000	34,666,000
Properties sold	-	(1,351,000)
Impairments	(6,000)	(928,000)
Improvements and betterments	15,210,000	13,581,000
Write-off of fully-depreciated assets	-	(18,996,000)
Balance, end of the year	$ 1,476,173,000	$ 1,450,951,000

Accumulated depreciation
Balance, beginning of the year	$ 251,605,000	$ 229,535,000
Properties held for sale	(18,523,000)	-
Depreciation expense	34,129,000	41,066,000
Write-off of fully-depreciated assets	-	(18,996,000)
Balance, end of the year	$ 267,211,000	$ 251,605,000

Net book value	$ 1,208,962,000	$ 1,199,346,000

At December 31, 2014, certain of the Company’s shopping center properties were pledged as collateral for mortgage loans payable. See Note 10 - “Mortgage Loans Payable and Credit Facilities”.

2014 Acquisition

On March 21, 2014, the Company acquired Quartermaster Plaza located in Philadelphia, Pennsylvania. The purchase price for the property was approximately $92.3 million, of which approximately $53.4 million was funded from the assumption of (1) a $42.1 million mortgage loan payable, bearing interest at the rate of 5.3% per annum and maturing in October 2015, and (2) an $11.3 million mortgage loan payable, bearing interest at the rate of 5.5% per annum and payable in October 2014 (repaid in June 2014), with the remainder being funded from the Company’s unsecured revolving credit facility. The Company incurred costs of $2.9 million in connection with this acquisition.

2013 Acquisitions

On August 16, 2013, the Company exercised the buy/sell option pursuant to the terms of the 60%-owned joint venture originally formed for the development of the Upland Square project, and the Company’s partner opted not to meet the offered purchase option. The Company acquired the remaining 40% interest in the property on October 31, 2013 for approximately $1.6 million, reflecting the impact of the Company’s preferred interest in the joint venture. As the property was previously controlled and consolidated by the Company, the acquisition of the 40% noncontrolling interest was recorded as a capital transaction. As such, the excess ($0.5 million) paid by the Company over the carrying value of the noncontrolling interest was recorded as a decrease in the Company’s shareholders’ equity.

On November 18, 2013, the Company acquired the Big Y Shopping Center located in Fairfield County, Connecticut. The purchase price for the property was approximately $34.5 million, of which approximately $33 million was funded from the Company’s unsecured revolving credit facility and the $1.5 million balance by the issuance of approximately 270,000 OP Units (based on the market price of the Company’s common stock). The Company incurred costs of $0.2 million in connection with this acquisition.

2012 Acquisitions

As more fully discussed in Note 5 – “Investment in Cedar/RioCan Joint Venture”, on October 10, 2012, the Company acquired a 100% interest in Franklin Village Plaza, located in Franklin, Massachusetts. As more fully discussed in Note 4 – “Discontinued Operations”, on October 12, 2012, the Company acquired the non-controlling 80% ownership interests in Meadows Marketplace, located in Hershey, Pennsylvania, and Fieldstone Marketplace, located in New Bedford, Massachusetts.

Properties Held For Sale/Conveyance Subsequent to December 31, 2013

During 2014, the Company determined to sell the properties listed below which did not meet the criteria set forth in the newly-adopted guidance for reporting discontinued operations (See Note 2 - Summary of Significant Accounting Policies):


		Date	Sales	Gain on
Property	Location	Sold	Price	Sale
Fairview Plaza	New Cumberland, PA	5/27/2014	$ 12,450,000	$ 3,810,000
Carbondale Plaza	Carbondale, PA	7/18/2014	10,700,000	123,000
Virginia Little Creek	Norfolk, VA	8/22/2014	9,850,000	2,209,000
Annie Land Plaza	Lovingston, VA	9/26/2014	3,500,000	-
Smithfield Plaza	Smithfield, VA	10/21/2014	12,350,000	-
St. James Square	Hagerstown, MA	11/5/2014	4,125,000	271,000
Circle Plaza	Shamokin Dam, PA	-	-	-
Liberty Marketplace	Dubois, PA	-	-	-
			$ 52,975,000	$ 6,413,000

As such, these properties have been classified as “real estate held for sale/conveyance” as of December 31, 2014 on the accompanying consolidated balance sheet, and their results of operations have remained in continuing operations. The carrying values of the assets of those properties that remained unsold at December 31, 2014 totaled $14.6 million, and are included in real estate held for sale/conveyance on the consolidated balance sheets. The Company recorded impairment charges of $3.4 million during 2014 relating to the above properties, which is included in continuing operations in the accompanying consolidated statements of operations.

Land Parcels

During 2014, 2013 and 2012, the Company sold the following land parcels:


		Date	Sales	Gain on
Property	Location	Sold	Price	Sale
2014
Blue Mountain Commons land parcel	Harrisburg, PA	10/22/2014	$ 350,000	$ -

2013
Huntingdon Plaza land parcel	Huntingdon, PA	3/29/2013	$ 390,000	$ 266,000
Upland Square land parcel	Pottstown, PA	11/8/2013	1,700,000	215,000
Oregon Pike land parcel	Lancaster, PA	12/23/2013	1,451,000	-
			$ 3,541,000	$ 481,000

2012
Blue Mountain Commons land parcel	Harrisburg, PA	6/19/2012	$ 102,000	$ 79,000
Oregon Pike land parcel	Lancaster, PA	6/28/2012	1,100,000	-
Trindle Springs land parcel	Mechanicsburg, PA	7/20/2012	800,000	-
Aston land parcel	Aston, PA	7/27/2012	1,365,000	402,000
Wyoming land parcel	Wyoming, MI	11/16/2012	1,000,000	516,000
			$ 4,367,000	$ 997,000

The Company recorded reversals of impairments of $0.3 million in 2014, in addition to impairment charges of $0.9 million and $1.1 million during 2013 and 2012, respectively, relating to land parcels, which are included in continuing operations in the accompanying consolidated statements of operations.