Net Investments in Properties

6 Months Ended

Jun. 30, 2011

Net Investments in Properties [Abstract]

Net Investments in Properties

Note 4.       Net Investments in Properties

Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and accounted for as operating leases, is summarized as follows (in thousands):

	June 30, 2011		December 31, 2010
Land	$	114,800	$	111,660
Buildings		532,123		448,932
Less: Accumulated depreciation		(113,380)		(108,032)
	$	533,543	$	452,560

Operating Real Estate

Operating real estate, which consists primarily of our self-storage investments through Carey Storage Management LLC ("Carey Storage") and our Livho subsidiary, at cost, is summarized as follows (in thousands):

	June 30, 2011		December 31, 2010
Land	$	24,030	$	24,030
Buildings		85,718		85,821
Less: Accumulated depreciation		(15,692)		(14,280)
	$	94,056	$	95,571

Real Estate Acquired

As discussed in Note 3, in connection with the CPA®:14/16 Mergerin May 2011, we purchased the remaining interests in certain properties, in whichwe already had a joint interest,from CPA®:14 as part of the CPA®:14 Asset Sales. These three properties, which wereleased to Checkfree, Federal Express and Amylin, had a fair value of $174.8 million at the date of acquisition. As part of the transaction, we assumed the related non-recourse mortgages on the Federal Express and Amylin properties. These two mortgages and the mortgage on the Checkfree property had an aggregate fair value of $117.1 million at the date of acquisition. Amounts provided are the total amounts attributable to the venture properties and do not represent the proportionate share that we purchased. We had previously consolidated the Checkfree property and accounted for the Federal Express and Amylin properties under the equity method. Upon acquiring the remaining interests in the properties leased to Federal Express and Amylin, we owned 100% of these entities and accounted for these acquisitions as step acquisitions utilizing the purchase method of accounting. Due to the change in control of the ventures that occurred, and in accordance with ASC 810 involving a step acquisition where control is obtained and there is a previously held equity interest, we recorded an aggregate gain of approximately $27.9 million related to the difference between our respective carrying values and the fair values of our previously held interests on the acquisition date. Subsequent to our acquisition, we consolidate all of these wholly-owned properties. The consolidation of these properties resulted in an increase of $90.2 million and $40.8 million to Real estate, net and net lease intangibles, respectively, from December 31, 2010 to June 30, 2011.

Other

In connection with our prior acquisitions of properties, we have recorded net lease intangibles of $81.8 million, which are being amortized over periods ranging from oneyear to 40 years. In-place lease, tenant relationship and above-market rent intangibles are included in Intangible assets and goodwill, net in the consolidated financial statements. Below-market rent intangibles are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements. Amortization of below-market and above-market rent intangibles is recorded as an adjustment to Lease revenues, while amortization of in-place lease and tenant relationship intangibles is included in Depreciation and amortization. Net amortization of intangibles, including the effect of foreign currency translation, was $1.7million and $1.3million for the three months ended June 30, 2011 and 2010, respectively, and $2.2 million and $3.1 million for thesix months ended June 30, 2011and 2010, respectively.