Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Properties Held For Sale

We did not have any properties held for sale as of December 31, 2012. We had two properties classified as held for sale at December 31, 2011, which were sold in January 2012. The major classes of assets and liabilities of these properties held for sale as of December 31, 2011 were as follows:

Real estate assets and other assets held for sale	(in thousands)
Land and improvements	$	6,490
Buildings and improvements	83,447
Total real estate held for sale	89,937
Accumulated depreciation	(14,905		)
Total real estate held for sale, net	75,032
Deferred rent receivables, net	6,749
Deferred leasing costs and acquisition-related intangible assets, net	2,375
Real estate assets and other assets held for sale, net	$	84,156
Liabilities and deferred revenue of real estate assets held for sale
Accounts payable, accrued expenses and other liabilities	$	24
Deferred revenue and acquisition-related intangible liabilities, net	13,223
Rents received in advance and tenant security deposits	39
Liabilities and deferred revenue of real estate assets held for sale	$	13,286

Dispositions

The following table summarizes properties sold during the years ended December 31, 2012, 2011, and 2010.

Location	Property Type	Month of Disposition	Number of Buildings	Rentable Square Feet	Sales Price (in millions) (1)
2012 Dispositions
15004 Innovation Drive and 10243 Genetic Center Drive, San Diego, CA (2)	Office	January	2	253,676	$	146.1
Industrial Portfolio (3)	Industrial	November/December	39	3,413,354
5151, 5153 & 5155 Camino Ruiz, Camarillo, CA	Office	December	4	265,372
4175 E. La Palma Avenue, Anaheim, CA	Office	December	1	43,263
Subtotal			44	3,721,989	354.2
Total			46	3,975,665	$	500.3
2011 Dispositions
10350 Barnes Canyon and 10120 Pacific Heights Drive, San Diego, CA	Office	September	2	90,558	$	23.9
2031 E. Mariposa Avenue, Los Angeles, CA	Industrial	December	1	192,053	42.2
Total			3	282,611	$	66.1
2010 Dispositions
660 N. Puente Street, Brea, CA	Industrial	October	1	51,567	$	5.0
601 Valencia Avenue, Brea, CA	Office	December	1	60,891	5.4
603 Valencia Avenue, Brea, CA	Office	December	1	45,900	5.4
Total			3	158,358	$	15.8

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(1) Represents gross sales price before the impact of broker commissions and selling costs.

(2) These properties were classified as held-for-sale on the consolidated balance sheets as of December 31, 2011.

(3) The industrial portfolio was sold in two tranches in November and December 2012 to two separate third party buyers.

At December 31, 2012, approximately $228.8 million of net proceeds related to the sale of the buildings during the quarter ended December 31, 2012 were temporarily being held at a qualified intermediary, at our direction, for the purpose of facilitating Section 1031 Exchanges. The $228.8 million cash proceeds are included in restricted cash on the consolidated balance sheets at December 31, 2012. In January 2013, we successfully completed two Section 1031 Exchanges and all cash proceeds were released from the qualified intermediary.

Discontinued Operations

The following table summarizes the income and expense components that comprise discontinued operations for the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31,
	2012			2011			2010
	(in thousands)
Revenues:
Rental income	$	22,337		$	39,226		$	39,404
Tenant reimbursements	3,902			5,502			6,330
Other property income	323			790			1,252
Total revenues	26,562			45,518			46,986
Expenses:
Property expenses	4,586			6,733			6,898
Real estate taxes	2,779			4,000			4,020
Provision for bad debts	(195		)	(137		)	(1,128		)
Depreciation and amortization	6,983			11,668			12,973
Interest expense (1)	—			3,624			4,859
Total expenses	14,153			25,888			27,622
Income from discontinued operations before net gain on dispositions of discontinued operations	12,409			19,630			19,364
Net gain on dispositions of discontinued operations	259,245			51,587			949
Total income from discontinued operations	$	271,654		$	71,217		$	20,313

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(1) Interest expense relates to a $70.0 million mortgage loan that was secured by 13 of our industrial properties. The mortgage loan was repaid in October 2011 prior to maturity.

The following table summarizes the total income from discontinued operations within the consolidated statements of operations by segment for the years ended December 31, 2012, 2011, and 2010:

	Year Ended December 31,
	2012		2011		2010
	(in thousands)
Office Properties	$	77,157	$	20,535	$	7,673
Industrial Properties(1)	194,497		50,682		12,640
Total income from discontinued operations	$	271,654	$	71,217	$	20,313

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(1) The industrial properties were no longer a segment at December 31, 2012 because we disposed of all of our industrial properties during the fourth quarter of 2012.