Acquisitions

Operating Property Acquisitions

During the year ended December 31, 2016, we acquired the seven operating properties listed below in three transactions with unrelated third parties. We did not acquire any operating properties during the year ended December 31, 2015.



Property	Date of Acquisition	Number of Buildings	Rentable Square Feet (unaudited)	Occupancy as of December 31, 2016 (unaudited)	Purchase Price (in millions) ⁽¹⁾
2016 Acquisitions
1290-1300 Terra Bella Avenue, Mountain View, CA⁽²⁾	June 8, 2016	1	114,175	100.0%	$	55.4
8560-8590 West Sunset Blvd., West Hollywood, CA ⁽³⁾	December 7, 2016	4	178,699	87.5%	209.2
1701 Page Mill Rd. and 3150 Porter Dr., Palo Alto, CA ⁽⁴⁾	December 19, 2016	2	165,585	100.0%	130.0
Total ⁽⁵⁾		7	458,459		$	394.6

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(1)	Excludes acquisition-related costs and non-lease related accrued liabilities assumed. Includes assumed unpaid leasing commissions and tenant improvements.


(2)	In connection with this acquisition, the Company assumed $0.2 million in accrued liabilities that are not included in the purchase price above.

(3)

This acquisition encompasses a 10-story office tower, three retail buildings, a four-level subterranean parking structure and three billboards. As of December 31, 2016, this property was temporarily being held in a separate VIE to facilitate potential Section 1031 Exchanges. During January 2017, the Company closed out the Section 1031 Exchange related to this VIE. See Note 2 “Basis of Presentation and Significant Accounting Policies.” In connection with this acquisition, the Company assumed $0.1 million in accrued liabilities that are not included in the purchase price above.


(4)	In connection with this acquisition, the Company entered into a long-term ground lease expiring in December 2067.


(5)	The results of operations for the properties acquired during 2016 contributed $5.2 million and $1.7 million to revenue and net income from continuing operations, respectively, for the year ended December 31, 2016.

The related assets, liabilities and results of operations of the acquired properties are included in the consolidated financial statements as of the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective acquisition dates for our 2016 operating property acquisitions:



Acquisitions	Total 2016 Acquisitions ⁽¹⁾

Assets	(in thousands)
Land and improvements	$	120,110
Buildings and improvements ⁽²⁾	259,301
Deferred leasing costs and acquisition-related intangible assets ⁽³⁾	33,529
Total assets acquired	412,940
Liabilities
Accounts payable, accrued expenses and other liabilities	1,122
Deferred revenue and acquisition-related intangible liabilities ⁽⁴⁾	18,050
Total liabilities assumed	19,172
Net assets and liabilities acquired	$	393,768

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(1)	The purchase price of the three acquisitions completed during the year ended December 31, 2016 were individually less than 5% and in aggregate less than 10% of the Company’s total assets as of December 31, 2015.


(2)	Represents buildings, building improvements and tenant improvements.


(3)	Represents in-place leases (approximately $27.1 million with a weighted average amortization period of 3.9 years), above-market leases (approximately $0.6 million with weighted average amortization period of 15.8 years) and leasing commissions (approximately $5.8 million with a weighted average amortization period of 5.1 years).


(4)	Represents below-market leases (approximately $18.1 million with a weighted average amortization period of 8.4 years)

Development Project Acquisitions

On March 11, 2016, we acquired an approximately 1.75 acre development site located at 610-620 Brannan Street in San Francisco, California from an unrelated third party. This land parcel is immediately adjacent to our Flower Mart project in the SOMA submarket of San Francisco. The acquisition was funded through $31.0 million in cash and the issuance of 867,701common units in the Operating Partnership valued at approximately $48.0 million (see Note 14). In addition, the Company paid $2.4 million in seller transaction costs and recorded $4.7 million in accrued liabilities in connection with this acquisition. As of December 31, 2016, the underlying assets were included as undeveloped land and construction in progress on our consolidated balance sheets.

During the year ended December 31, 2015 we acquired the following undeveloped land sites listed below from unrelated third parties:



Project	Date of Acquisition	City/Submarket	Type	Purchase Price ⁽¹⁾ (in millions)
2015 Acquisitions
333 Dexter ⁽²⁾	February 13, 2015	Seattle, WA	Land	$	49.5
100 Hooper ⁽³⁾	July 7, 2015	San Francisco, CA	Land	78.0
Total				$	127.5

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(1)	See Note 18 “Commitments and Contingencies” for additional information on certain accrued liabilities for these acquisitions.


(2)	Acquisition comprised of four adjacent parcels in the South Lake Union submarket of Seattle, Washington located at 330 Dexter Avenue North, 333 Dexter Avenue North, 401 Dexter Avenue North, and 400 Aurora Avenue North. In connection with this acquisition, we also assumed $2.4 million in accrued liabilities and acquisition costs that are not included in the purchase price above.


(3)	Includes the land parcel located at 150 Hooper. In connection with this acquisition, we assumed $4.1 million in accrued liabilities and acquisition costs that are not included in the purchase price above.