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ACQUISITIONS AND DISPOSITIONS | 6 Months Ended
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Jun. 30, 2019
Business Combinations [Abstract] |
ACQUISITIONS AND DISPOSITIONS | ACQUISITIONS AND DISPOSITIONS The fair value of real estate acquired is recorded to the acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, and furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, if any, based in each case on their respective fair values. Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market rate loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate. 2019 Transactions—There were no acquisitions during the six months ended June 30, 2019. We sold 100% fee-simple interests in the following properties to unrelated third-parties during the six months ended June 30, 2019. Transaction costs related to these sales were expensed as incurred.
Property |  | Asset Type |  | Date of Sale |  | Square Feet |  | Sales Price |  | Transaction Costs |  | Gain on Sale
|  |  |  |  |  |  |  | (in thousands)
March Oakland Properties, Oakland, CA (1) |  | Office / Parking Garage |  | March 1, 2019 |  | 975,596 |  |  | $ | 512,016 |  |  | $ | 8,971 |  |  | $ | 289,779 |
830 1st Street, Washington, D.C. |  | Office |  | March 1, 2019 |  | 247,337 |  |  | 116,550 |  |  | 2,438 |  |  | 45,710 |
260 Townsend Street, San Francisco, CA |  | Office |  | March 14, 2019 |  | 66,682 |  |  | 66,000 |  |  | 2,539 |  |  | 42,092 |
1333 Broadway, Oakland, CA |  | Office |  | May 16, 2019 |  | 254,523 |  |  | 115,430 |  |  | 658 |  |  | 55,221 |
|  |  |  |  |  |  |  | $ | 809,996 |  |  | $ | 14,606 |  |  | $ | 432,802 |
(1) | The "March Oakland Properties" consist of 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, and 2353 Webster Street Parking Garage.
The results of operations of the properties we sold have been included in the consolidated statements of operations through each property's respective disposition date. The following is the detail of the carrying amounts of assets and liabilities at the time of the sales of the properties that occurred during the six months ended June 30, 2019:
|  | (in thousands)
Assets |  |
Investments in real estate, net |  | $ | 318,918 |
Deferred rent receivable and charges, net |  | 41,280 |
Other intangible assets, net |  | 316 |
Total assets |  | $ | 360,514 |
Liabilities |  |
Debt, net (1) (2) |  | $ | 318,072 |
Total liabilities |  | $ | 318,072 |
(1) | Debt is presented net of deferred loan costs of $1,704,000 and accumulated amortization of $576,000.
(2) | A mortgage loan with an outstanding principal balance of $28,200,000 was assumed by the buyer in connection with the sale of our property in San Francisco, California. A mortgage loan with an outstanding principal balance of $46,000,000 was prepaid in connection with the sale of our property in Washington, D.C. that was collateral for the loan. Mortgage loans with an aggregate outstanding principal balance of $205,500,000 were legally defeased in connection with the sale of the March Oakland Properties that were collateral for the loans. A mortgage loan with an outstanding principal balance of $39,500,000 was legally defeased in connection with the sale in May 2019 of our property in Oakland, California that was collateral for the loan.
2018 Transactions—On January 18, 2018, we acquired a 100% fee-simple interest in an office property known as 9460 Wilshire Boulevard from an unrelated third-party. The property has approximately 68,866 square feet of office space and 22,884 square feet of retail space and is located in Beverly Hills, California. The acquisition was funded with proceeds from our Series L Preferred Stock offering, and the acquired property is reported as part of the office segment (Note 18). We performed an analysis and, based on our analysis, we determined this acquisition was an asset purchase and not a business combination. As such, transaction costs were capitalized as incurred in connection with this acquisition.
Property |  | Asset Type |  | Date of Acquisition |  | Square Feet |  | Purchase Price (1)
|  |  |  |  |  |  |  | (in thousands)
9460 Wilshire Boulevard, Beverly Hills, CA |  | Office |  | January 18, 2018 |  | 91,750 |  | $ | 132,000 |
(1) | In December 2017, at the time we entered into the purchase and sale agreement, we made a $20,000,000 non-refundable deposit to an escrow account that was included in other assets on our consolidated balance sheet at December 31, 2017. Transaction costs that were capitalized in connection with the acquisition of this property totaled $48,000, which are not included in the purchase price above.
The results of operations of the property we acquired during the six months ended June 30, 2018 have been included in the consolidated statements of operations from the date of acquisition. The purchase price of the acquisition completed during the six months ended June 30, 2018 was less than 10% of our total assets as of the most recent annual consolidated financial statements filed at or prior to the date of acquisition. The fair value of the net assets acquired for the aforementioned acquisition during the six months ended June 30, 2018 are as follows:
|  | (in thousands)
Land |  | $ | 52,199 |
Land improvements |  | 756 |
Buildings and improvements |  | 74,522 |
Tenant improvements |  | 1,451 |
Acquired in-place leases (1) |  | 7,003 |
Acquired above-market leases (1) |  | 109 |
Acquired below-market leases (1) |  | (3,992 | )
Net assets acquired |  | $ | 132,048 |
(1) | Acquired in-place leases, above-market leases, and below-market leases have weighted average amortization periods of 3 years, 2 years, and 3 years, respectively.
There were no dispositions during the six months ended June 30, 2018. Assets Held for Sale As noted above, in March 2019, we sold a 100% fee-simple interest in an office property located at 260 Townsend Street in San Francisco, California to an unrelated third-party. The office property had been classified as held for sale as of December 31, 2018, as the purchase and sale agreement was entered into and became subject to a non-refundable deposit prior to December 31, 2018. In connection with our negotiation of an agreement with an unrelated third-party for the sale of 100% fee-simple interests in two office properties located at 899 and 999 N Capitol Street and one development site located at 901 N Capitol Street, all in Washington, D.C., we determined that the book values of such properties exceeded their estimated fair values and recognized an impairment charge of $66,200,000 during the three months ended March 31, 2019 under the held-and-used impairment model. Following our signing the agreement for the sale of the aforementioned properties and our receipt of a non-refundable deposit in respect of their sale in June 2019, such properties were classified as held for sale as of June 30, 2019 and we recognized an additional impairment charge of $2,800,000 under the held-for-sale impairment model. As such, $2,800,000 and $69,000,000 was recognized during the three and six months ended June 30, 2019, respectively. Our determination of the fair values of these properties was based on negotiations with the third-party buyer and the contract sales price. The sale of such properties closed in July 2019 and we expect to recognize a gain on sale of approximately $200,000. The following is the detail of the carrying amounts of assets and liabilities for the office properties that are classified as held for sale on our consolidated balance sheets as of June 30, 2019 and December 31, 2018:
|  | June 30, 2019 |  | December 31, 2018
|  | (in thousands)
Assets |  |  |  |
Investments in real estate, net (1) |  | $ | 157,608 |  |  | $ | 17,123 |
Cash and cash equivalents |  | 2,050 |  |  | 755 |
Accounts receivable, net |  | 1,075 |  |  | 41 |
Deferred rent receivable and charges, net (2) |  | 13,992 |  |  | 4,009 |
Other intangible assets, net (3) |  | — |  |  | 220 |
Other assets (4) |  | 4,202 |  |  | 27 |
Total assets held for sale, net |  | $ | 178,927 |  |  | $ | 22,175 |
Liabilities |  |  |  |
Debt, net (5) |  | $ | — |  |  | $ | 28,018 |
Accounts payable and accrued expenses |  | 2,160 |  |  | 370 |
Due to related parties |  | 518 |  |  | 81 |
Other liabilities |  | 567 |  |  | 297 |
Total liabilities associated with assets held for sale, net |  | $ | 3,245 |  |  | $ | 28,766 |
(1) | Investments in real estate of $230,523,000 and $24,832,000 at June 30, 2019 and December 31, 2018, respectively, are presented net of accumulated depreciation of $72,915,000 and $7,709,000, respectively.
(2) | Deferred rent receivable and charges consist of deferred rent receivable of $9,640,000 and deferred leasing costs of $11,165,000 net of accumulated amortization of $6,813,000 at June 30, 2019. Deferred rent receivable and charges consist of deferred rent receivable of $2,909,000 and deferred leasing costs of $1,669,000 net of accumulated amortization of $569,000 at December 31, 2018.
(3) | Other intangible assets, net, at December 31, 2018 represent acquired in-place leases of $1,778,000, which are presented net of accumulated amortization of $1,558,000.
(4) | Other assets at June 30, 2019 include lease inducements of $8,966,000, which are presented net of accumulated amortization of $4,870,000.
(5) | Debt, net, at December 31, 2018 includes the outstanding principal balance of 260 Townsend Street of $28,200,000, net of deferred loan costs of $243,000 and accumulated amortization of $61,000.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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