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Net Investments in Properties
 6 Months Ended
Jun. 30, 2014
Real Estate [Abstract]  
Net Investments in Properties
Net Investments in Properties
 
Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, and real estate under construction, is summarized as follows (in thousands):
 
June 30, 2014
 
December 31, 2013
Land
$
1,107,594

 
$
534,697

Buildings
3,375,775

 
1,972,107

Real estate under construction
14,630

 
9,521

Less: Accumulated depreciation
(214,543
)
 
(168,076
)
 
$
4,283,456

 
$
2,348,249


 
As discussed in Note 3, we acquired 225 properties subject to existing operating leases in the CPA®:16 Merger, which increased the carrying value of our real estate by $2.0 billion during the six months ended June 30, 2014. In connection with restructuring two leases, we reclassified properties with an aggregate carrying value of $7.0 million from Net investments in direct financing leases to Real estate during the six months ended June 30, 2014 (Note 6).

Acquisitions of Real Estate

During the six months ended June 30, 2014, we entered into the following investments, which were deemed to be business combinations because we assumed the existing leases on the properties, at a total cost of $89.1 million, including land of $13.3 million, building of $60.3 million and net lease intangibles of $15.5 million (Note 8):

•
an investment of $41.9 million for an office building in Chandler, Arizona on March 26, 2014; and
•
an investment of $47.2 million for a warehouse/distribution facility in University Park, Illinois on May 15, 2014.

In connection with these transactions, we expensed acquisition-related costs of $0.2 million, which are included in Merger and acquisition costs in the consolidated financial statements.

Operating Real Estate
 
Operating real estate, which consists of our investments in two hotels acquired in the CPA®:16 Merger and two self-storage properties, at cost, is summarized as follows (in thousands): 
 
June 30, 2014
 
December 31, 2013
Land
$
7,027

 
$
1,097

Buildings
77,517

 
4,927

Less: Accumulated depreciation
(2,612
)
 
(882
)
 
$
81,932

 
$
5,142



Assets Held for Sale

Below is a summary of our properties held for sale (in thousands):
 
June 30, 2014
 
December 31, 2013
Real estate, net
$
—

 
$
62,466

Above-market rent intangible assets, net
—

 
13,872

In-place lease intangible assets, net
—

 
12,293

Below-market rent and other intangible liabilities, net
—

 
(1,808
)
Assets held for sale
$
—

 
$
86,823


At December 31, 2013, we had nine properties classified as Assets held for sale, all of which were sold during the six months ended June 30, 2014. In connection with the CPA®:16 Merger in January 2014, we acquired ten properties that were classified as Assets held for sale with a total fair value of $133.4 million, all of which were sold during the six months ended June 30, 2014. The results of operations for these properties are reflected in the consolidated financial statements as discontinued operations (Note 15).

During the six months ended June 30, 2014, we reclassified one property with a carrying value of $1.3 million to Assets held for sale, which was then subsequently sold. The results of operations for this property are included within continuing operations in the consolidated financial statements.