Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Acquisitions and Dispositions

Acquisitions and Dispositions

2013 Acquisitions

We acquired 15 operating properties during the nine months ended September 30, 2013. These acquisitions consisted of three industrial properties in Central and Southern New Jersey, three industrial properties in Southern California, two industrial properties in Central California, one industrial property in Houston, Texas, one industrial property near Kansas City, Missouri, one industrial property near St. Louis, Missouri, two industrial properties in Northeast and Central Pennsylvania, one industrial property near Indianapolis, Indiana and one medical office property in Central Florida. The following table summarizes the fair value of amounts recognized for each major class of asset and liability (in thousands) for these acquisitions:

Real estate assets	$	422,538
Lease related intangible assets	58,826
Total acquired assets	481,364
Secured debt	103,638
Below market lease liability	1,469
Other liabilities	1,448
Total assumed liabilities	106,555
Fair value of acquired net assets	$	374,809

The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 7.6 years.

Fair Value Measurements

The fair value estimates used in allocating the aggregate purchase price of each acquisition among the individual components of real estate assets and liabilities were determined primarily through calculating the "as-if vacant" value of each building, using the income approach, and relied significantly upon internally determined assumptions. We have determined these estimates to have been primarily based upon Level 3 inputs, which are unobservable inputs based on our own assumptions. The range of most significant assumptions utilized in making the lease-up and future disposition estimates used in calculating the "as-if vacant" value of each building acquired during the nine months ended September 30, 2013 were as follows:

	Low		High
Discount rate	6.60	%	9.67	%
Exit capitalization rate	5.10	%	7.67	%
Lease-up period (months)	12		24
Net rental rate per square foot – Industrial	$2.95		$8.28
Net rental rate per square foot – Medical Office	$18.00		$18.00

Acquisition-Related Activity

The acquisition-related activity in our Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30, 2013 and 2012 consisted of transaction costs related to completed acquisitions, which are expensed as incurred, as well as gains or losses related to acquisitions where we had a pre-existing non-controlling ownership interest. We recognized a gain of $962,000 on the pre-existing ownership interest that we held in one of the industrial properties we acquired and expenses of $3.5 million for transaction costs during the nine months ended September 30, 2013.

Activity during the nine months endedSeptember 30, 2012 consisted of transaction costs related to acquisitions, which were expensed as incurred.

Dispositions

We disposed of certain consolidated income-producing real estate assets and undeveloped land and received net cash proceeds of $330.7 million and $112.6 million during the nine months ended September 30, 2013 and 2012, respectively.

During the nine months endedSeptember 30, 2013, 17 office properties and one industrial property were sold from certain of our unconsolidated joint ventures for which our capital distributions totaled $89.5 million. Our share of gains from joint venture property sales, which are included in equity in earnings, related almost entirely to these sales and totaled $49.0 million.