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INVESTMENT IN REAL ESTATE | 9 Months Ended
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Sep. 30, 2020
Business Combinations [Abstract] |
INVESTMENT IN REAL ESTATE | 3. INVESTMENTS IN REAL ESTATE Investments in real estate consist of the following:
|  | September 30, 2020 |  | December 31, 2019
|  | (in thousands)
Land |  | $ | 134,421 |  |  | $ | 134,421 |
Land improvements |  | 2,603 |  |  | 2,713 |
Buildings and improvements |  | 450,199 |  |  | 438,349 |
Furniture, fixtures, and equipment |  | 4,682 |  |  | 4,628 |
Tenant improvements |  | 33,562 |  |  | 35,667 |
Work in progress |  | 8,578 |  |  | 13,484 |
Investments in real estate |  | 634,045 |  |  | 629,262 |
Accumulated depreciation |  | (129,704) |  |  | (120,555) |
Net investments in real estate |  | $ | 504,341 |  |  | $ | 508,707 |
We recorded depreciation expense of $4,366,000 and $4,156,000 for the three months ended September 30, 2020 and 2019, respectively, and $12,960,000 and $17,908,000 for the nine months ended September 30, 2020 and 2019, respectively. 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, 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. 2020 Transactions—There were no acquisitions or dispositions during the nine months ended September 30, 2020. 2019 Transactions—There were no acquisitions during the nine months ended September 30, 2019. We sold 100% fee-simple interests in the following properties to unrelated third-parties during the nine months ended September 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 |
Union Square Properties, Washington, D.C. (2) |  | Office / Land |  | July 30, 2019 |  | 630,650 |  |  | 181,000 |  |  | 3,744 |  |  | 302 |
|  |  |  |  |  |  |  | $ | 990,996 |  |  | $ | 18,350 |  |  | $ | 433,104 |
(1)The “March Oakland Properties” consist of 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, and 2353 Webster Street Parking Garage. (2)The "Union Square Properties" consist of 999 North Capitol Street, 899 North Capitol Street and 901 North Capitol Street. Prior to the sale, we determined that the book values of such properties exceeded their estimated fair values and recognized no impairment charge for the three months ended September 30, 2019, and $69,000,000 for the nine months ended September 30, 2019 (Note 2). Our determination of the fair values of these properties was based on negotiations with the third-party buyer and the contract sales price. The gain on sale includes $113,000 of extinguishment of noncontrolling interests as a result of the sale. 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 nine months ended September 30, 2019:
|  | (in thousands)
Assets |  |
Investments in real estate, net |  | $ | 476,532 |
Deferred rent receivable and charges, net |  | 55,297 |
Other intangible assets, net |  | 316 |
Other assets |  | 4,096 |
Total assets |  | $ | 536,241 |
Liabilities |  |
Debt, net (1) (2) |  | $ | 318,072 |
Total liabilities |  | $ | 318,072 |
(1)Debt, net 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 in March 2019 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.

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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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