Discontinued Operations, Assets Held-for-Sale and Impairments

The following table illustrates the number of sold or held-for-sale properties included in, or excluded from, discontinued operations:



	Held-for-Sale at December 31, 2015	Sold in 2015	Sold in 2014	Sold in 2013	Total
Office	0	56	0	12	68
Industrial	0	5	11	6	22
Medical Office	0	1	1	6	8
Retail	0	0	0	1	1
Total properties included in discontinued operations	0	62	12	25	99
Properties excluded from discontinued operations	4	91	17	13	125
Total properties sold or classified as held-for-sale	4	153	29	38	224

We allocate interest expense to discontinued operations and have included such interest expense in computing income from discontinued operations. Interest expense allocable to discontinued operations includes interest on any secured debt for properties included in discontinued operations and an allocable share of our consolidated unsecured interest expense for unencumbered properties. The allocation of unsecured interest expense to discontinued operations was based upon the gross book value of the unencumbered real estate assets included in discontinued operations as it related to the total gross book value of our unencumbered real estate assets.

The following table illustrates the operations of the buildings reflected in discontinued operations for the years ended December 31, 2015, 2014 and 2013, respectively (in thousands):



	2015			2014			2013
Revenues	$	32,549		$	120,884		$	159,096
Operating expenses	(12,498		)	(47,123		)	(62,048		)
Depreciation and amortization	(3,517		)	(38,342		)	(55,594		)
Operating income	16,534			35,419			41,454
Interest expense	(5,595		)	(24,348		)	(37,649		)
Income before gain on sales	10,939			11,071			3,805
Gain on sale of depreciable properties	424,892			22,763			133,242
Income from discontinued operations before income taxes	435,831			33,834			137,047
Income tax expense	(3,175		)	(2,969		)	—
Income from discontinued operations	$	432,656		$	30,865		$	137,047

Income tax expense included in discontinued operations was the result of the sale of a property, prior to the adoption of ASU 2014-08, that was partially owned by our taxable REIT subsidiary where we have no continuing involvement.

Capital expenditures on a cash basis for the years ended December 31, 2015, 2014 and 2013 were $7.4 million, $32.5 million and $21.7 million, respectively, related to properties classified within discontinued operations.

Dividends or distributions on preferred shares or Preferred Units and adjustments for the redemption or repurchase of preferred shares or Preferred Units are allocated entirely to continuing operations for both the General Partner and the Partnership.

Allocation of Noncontrolling Interests - General Partner

The following table illustrates the General Partner's share of the income (loss) attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income or loss between continuing and discontinued operations to noncontrolling interests, for the years ended December 31, 2015, 2014 and 2013, respectively (in thousands):



	2015		2014		2013
Income from continuing operations attributable to common shareholders	$	187,099	$	174,419	$	21,109
Income from discontinued operations attributable to common shareholders	428,211		30,474		131,935
Net income attributable to common shareholders	$	615,310	$	204,893	$	153,044

Allocation of Noncontrolling Interests - Partnership

Substantially all of the income from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders, with the exception of the 2013 sale of a property from a consolidated real estate joint venture.

Properties Held for Sale

At December 31, 2015, we have classified four in-service properties as held-for-sale, but have included the results of operations of these properties in continuing operations because they did not qualify as discontinued operations pursuant to ASC 2014-08. The following table illustrates aggregate balance sheet information of these held-for-sale properties (in thousands):



	December 31, 2015			December 31, 2014
	Held-for-Sale Properties Included in Continuing Operations			Properties Included in Continuing Operations			Properties Included in Discontinued Operations			Total Held-For-Sale Properties
Land and improvements	$	9,797		$	21,347		$	126,921		$	148,268
Buildings and tenant improvements	39,480			36,925			721,398			758,323
Undeveloped land	—			12,443			—			12,443
Accumulated depreciation	(7,183		)	(23,071		)	(247,269		)	(270,340		)
Deferred leasing and other costs, net	3,293			3,480			44,840			48,320
Other assets	414			562			27,475			28,037
Total assets held-for-sale	$	45,801		$	51,686		$	673,365		$	725,051

Secured debt	$	—		$	—		$	40,764		$	40,764
Accrued expenses	322			233			5,180			5,413
Other liabilities	650			434			12,481			12,915
Total liabilities held-for-sale	$	972		$	667		$	58,425		$	59,092

Impairment Charges

The following table illustrates impairment charges recognized during the years ended December 31, 2015 and 2014, respectively (in thousands):



	2015		2014		2013
Impairment charges - land	$	19,526	$	33,700	$	3,777
Impairment charges - building	3,406		15,406		—
Impairment charges	$	22,932	$	49,106	$	3,777

As the result of changes in our intended use for certain of our undeveloped land holdings, we recognized impairment charges of $19.5 million and $33.7 million for the years ended December 31, 2015 and 2014, respectively. The various land holdings written down to fair value, totaled 139 and 442 acres for the years ended December 31, 2015 and 2014, respectively. The fair value of the land upon which we recognized impairment charges was estimated based on asset-specific offers to purchase, comparable transactions and, in certain cases, estimates made by national and local independent real estate brokers who were familiar with the land parcels subject to evaluation as well as with conditions in the specific markets where the various land parcels are located. In all cases when estimates from brokers were utilized, members of our senior management who were responsible for the individual markets where the land parcels are located, and members of the Company’s accounting and financial management team, reviewed the broker’s estimates for factual accuracy and reasonableness. In all cases, we were ultimately responsible for all valuation estimates made in determining the extent of the impairment. Our valuation estimates primarily relied upon Level 3 inputs.

During the fourth quarter of 2014, we completed a review of our existing portfolio of buildings and determined that certain buildings, which had previously not been actively marketed for disposal, were not strategic and would not be held as long-term investments. Impairment charges of $15.4 million were recognized for the year ended December 31, 2014. We determined that, as the result of this change to management's strategy, six properties were impaired during the year ended December 31, 2014. Our estimates of fair value for these buildings were based primarily upon asset-specific purchase and sales contracts as well as using the income approach for a single property. For the property for which the income approach was utilized in determining fair value, which was an office property in Washington D.C., the most significant assumptions utilized were the exit capitalization rate of 8.50% and the net rental rate of $12.50 per square foot. We have concluded that our valuation estimates for the building impairments recognized during 2014 were primarily based on Level 3 inputs.