| Summary of identified deferred leasing costs and acquisition-related intangible assets | The following table summarizes our deferred leasing costs and acquisition-related intangible assets (acquired value of leasing costs, above-market leases, and in-place leases) and intangible liabilities (acquired value of below-market leases and above-market ground lease) as of September 30, 2011 and December 31, 2010: | | | | | | | | | | September 30, 2011 | | December 31, 2010 | | (in thousands) | Deferred Leasing Costs and Acquisition-related Intangible Assets, net(1): | | | | Deferred leasing costs | $ | 136,374 |
| | $ | 128,980 |
| Accumulated amortization | (48,290 | ) | | (45,869 | ) | Deferred leasing costs, net | 88,084 |
| | 83,111 |
| Above-market leases | 28,143 |
| | 21,321 |
| Accumulated amortization | (6,250 | ) | | (2,163 | ) | Above-market leases, net | 21,893 |
| | 19,158 |
| In-place leases | 57,195 |
| | 36,964 |
| Accumulated amortization | (11,415 | ) | | (8,167 | ) | In-place leases, net | 45,780 |
| | 28,797 |
| Total deferred leasing costs and acquisition-related intangible assets, net | $ | 155,757 |
| | $ | 131,066 |
| Acquisition-related Intangible Liabilities, net(1)(2): | | | | Below-market leases | $ | 35,852 |
| | $ | 21,938 |
| Accumulated amortization | (3,844 | ) | | (5,094 | ) | Below-market leases, net | 32,008 |
| | 16,844 |
| Above-market ground lease obligation | 5,200 |
| | — |
| Accumulated amortization | (21 | ) | | — |
| Above-market ground lease obligation, net | 5,179 |
| | — |
| Total acquisition-related intangible liabilities, net | $ | 37,187 |
| | $ | 16,844 |
|
________________________ | | (1) | Balances and accumulated amortization amounts at September 30, 2011 reflect the write-off of the following fully amortized amounts at January 1, 2011: deferred leasing costs (approximately $10.4 million), in-place leases (approximately $5.0 million), and below-market leases (approximately $3.8 million). Our accounting policy is to write-off the asset and corresponding accumulated amortization for fully amortized balances on January 1st of each fiscal year. |
(2) Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets. |
| Amortization for the period related to deferred leasing costs and acquisition-related intangibles | The following table sets forth amortization related to deferred leasing costs and acquisition-related intangibles for the three and nine months ended September 30, 2011 and 2010:
| | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | 2011 | | 2010 | | 2011 | | 2010 | | | (in thousands) | | (in thousands) | | Deferred leasing costs(1) | $ | 4,317 |
| | $ | 3,886 |
| | $ | 12,053 |
| | $ | 9,559 |
| | Net above-market leases(2) | 121 |
| | 664 |
| | 1,519 |
| | 696 |
| | In-place leases(1) | 3,379 |
| | 1,220 |
| | 8,238 |
| | 1,505 |
| | Above-market ground lease obligation(3) | 16 |
| | — |
| | 21 |
| | — |
| | Total | $ | 7,833 |
| | $ | 5,770 |
| | $ | 21,831 |
| | $ | 11,760 |
| |
_________________________ (1) The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented. (2) The amortization of net above-market leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented. (3) The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented. |
| Estimated annual amortization related to deferred leasing costs and acquisition-related intangibles | The following table sets forth the estimated annual amortization expense related to deferred leasing costs and acquisition-related intangibles as of September 30, 2011 for future periods: | | | | | | | | | | | | | | | | | Year Ending | Deferred Leasing Costs | | Net Above-/(Below)-Market Leases(1) | | In-Place Leases | | Above-Market Ground Lease Obligation | | (in thousands) | Remaining 2011 | $ | 4,748 |
| | $ | (78 | ) | | $ | 3,643 |
| | $ | 16 |
| 2012 | 17,689 |
| | (1,534 | ) | | 12,863 |
| | 63 |
| 2013 | 15,823 |
| | (1,690 | ) | | 10,578 |
| | 63 |
| 2014 | 13,796 |
| | (1,339 | ) | | 7,830 |
| | 63 |
| 2015 | 10,387 |
| | (790 | ) | | 4,366 |
| | 63 |
| Thereafter | 25,641 |
| | (4,684 | ) | | 6,500 |
| | 4,911 |
| Total | $ | 88,084 |
| | $ | (10,115 | ) | | $ | 45,780 |
| | $ | 5,179 |
|
_______________________ | | (1) | Represents estimated annual net amortization related to above-/(below)-market leases. Amounts shown represent net below-market leases which will be recorded as an increase to rental income in the consolidated statements of operations. |
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