Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations and Land Held for Sale

Operating Property Dispositions

The following table summarizes the properties sold during the years ended December 31, 2014, 2013 and 2012:

Location	Property Type	Month of Disposition	Number of Buildings	Rentable Square Feet (unaudited)	Sales Price (in millions) (1)
2014 Dispositions
San Diego Properties, San Diego, CA (2)	Office	January	12	1,049,035	$	294.7
9785 & 9791 Towne Centre Drive, San Diego, CA	Office	June	2	126,000	29.5
111 Pacifica, Irvine, CA	Office	September	1	67,496	15.1
4040 Civic Center Drive, San Rafael, CA	Office	October	1	130,237	34.9
999 Town & Country Road, Orange, CA	Office	December	1	98,551	25.3
Total 2014 dispositions			17	1,471,319	$	399.5
2013 Dispositions
26541 Agoura Road, Calabasas, CA	Office	June	1	90,156	$	14.7
8101 Kaiser Boulevard, Anaheim, CA	Office	October	1	59,790	9.6
4910 Directors Place, San Diego CA	Office	December	1	50,360	32.6
Total 2013 dispositions			3	200,306	$	56.9
2012 Dispositions
15004 Innovation Drive and 10243 Genetic Center Drive,    San Diego, CA	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 industrial portfolio			44	3,721,989	354.2
Total 2012 dispositions			46	3,975,665	$	500.3

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

(2) The San Diego Properties included the following: 10020 Pacific Mesa Boulevard, 6055 Lusk Avenue, 5010 and 5005 Wateridge Vista Drive, 15435 and 15445 Innovation Drive, and 15051, 15073, 15231, 15253, 15333 and 15378 Avenue of Science. These properties were held for sale as of December 31, 2013.

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

The major classes of assets and liabilities of the properties held for sale as of December 31, 2013 were as follows:

Real estate assets and other assets held for sale	(in thousands)
Land and improvements	$	49,656
Buildings and improvements	209,594
Total real estate held for sale	259,250
Accumulated depreciation and amortization	(63,110		)
Total real estate held for sale, net	196,140
Current receivables, net	269
Deferred rent receivables, net	8,978
Deferred leasing costs and acquisition-related intangible assets, net	5,791
Prepaid expenses and other assets, net	1,922
Real estate and other assets held for sale, net	$	213,100
Liabilities and deferred revenue of real estate assets held for sale
Accounts payable, accrued expenses and other liabilities	$	1,153
Deferred revenue and acquisition-related intangible liabilities, net	10,723
Rents received in advance and tenant security deposits	2,571
Liabilities and deferred revenue of real estate assets held for sale	$	14,447

Discontinued Operations

For the year ended December 31, 2014, discontinued operations includes the income and net gain on all the properties sold in 2014, except for the operations deemed immaterial related to a June 2014 office property disposition. For the years ended December 31, 2013 and 2012, discontinued operations included the results of all properties sold in 2014, 2013 and 2012 and classified as held for sale at December 31, 2013. The following table summarizes the revenue and expense components that comprise income from discontinued operations for the years ended December 31, 2014, 2013 and 2012:

	Year Ended December 31,
	2014		2013		2012
	(in thousands)
Revenues:
Rental income	$	7,206	$	31,984	$	49,689
Tenant reimbursements	278		3,546		6,544
Other property income	13		5,178		1,923
Total revenues	7,497		40,708		58,156
Expenses:
Property expenses	2,171		7,207		9,945
Real estate taxes	692		3,523		5,696
Provision for bad debts	—		—		(195		)
Depreciation and amortization	2,061		12,600		19,379
Total expenses	4,924		23,330		34,825
Income from discontinued operations before net gain on dispositions of discontinued operations	2,573		17,378		23,331
Net gain on dispositions of discontinued operations	121,922		12,252		259,245
Total income from discontinued operations	$	124,495	$	29,630	$	282,576

Real Estate Held for Sale

As of December 31, 2014, the Company had one land parcel located at 17150 Von Karman in Irvine, California, classified as held for sale. In January 2015, the Company completed this sale for a gross sales price of $26.0 million (see Note 24 “Subsequent Events” for additional information). The land parcel did not meet the criteria for classification as discontinued operations as of December 31, 2014 because it did not have any significant operations prior to disposal.

Land Disposition

During the year ended December 31, 2014, the Company sold a land parcel located at 10850 Via Frontera in the Rancho Bernardo submarket of San Diego, California for a gross sales price of $33.1 million, resulting in a gain on sale of $3.5 million. The gain on sale is included on our consolidated statements of operations as gain on sale of land within continuing operations.

Restricted Cash Related to Dispositions

As of December 31, 2014 and 2013, approximately $59.2 million and $32.2 million, respectively, of net proceeds related to the land and office property dispositions during the years ended December 31, 2014 and 2013, were temporarily being held at qualified intermediaries, at our direction, for the purpose of facilitating Section 1031 Exchanges. The cash proceeds are included in restricted cash on the consolidated balance sheets at December 31, 2014 and 2013. In January 2015 and February 2014, we successfully completed Section 1031 Exchanges and the $59.2 million and $32.2 million of cash proceeds comprising the balances as of December 31, 2014 and 2013, respectively, were released from the qualified intermediary.