Investment in Real Estate

6 Months Ended

Jun. 30, 2013

Investment in Real Estate [Abstract]

Investment in Real Estate

3. Investment in Real Estate

Acquisitions

During the six months ended June 30, 2013, we acquired one industrial property comprising approximately 0.5 million square feet of GLA and several land parcels. The purchase price of these acquisitions totaled approximately $46,463, excluding costs incurred in conjunction with the acquisition of the industrial property and land parcels.

Sales and Discontinued Operations

During the six months ended June 30, 2013, we sold 12 industrial properties comprising approximately 1.3 million square feet of GLA and two land parcels. Gross proceeds from the sales of the industrial properties and land parcels were approximately $52,598. The net gain on the sale of the industrial properties and land parcels was approximately $10,669. The 12 sold industrial properties meet the criteria to be included in discontinued operations. Therefore the results of operations and net gain on sale of real estate for the 12 industrial properties sold are included in discontinued operations. The results of operations and gain on sale of real estate for the two land parcels that do not meet the criteria to be included in discontinued operations are included in continuing operations.

At June 30, 2013, we had two industrial properties comprising approximately 0.1 million square feet of GLA held for sale. The results of operations of these industrial properties held for sale at June 30, 2013 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.

Income from discontinued operations for the six months ended June 30, 2012 reflects the results of operations of the 12 industrial properties that were sold during the six months ended June 30, 2013, the results of operations of 26 industrial properties that were sold during the year ended December 31, 2012, the results of operations of the two industrial properties identified as held for sale at June 30, 2013 and the gain on sale of real estate relating to six industrial properties that were sold during the six months ended June 30, 2012.

The following table discloses certain information regarding the industrial properties included in discontinued operations for the three and six months ended June 30, 2013 and 2012:

	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012			Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Total Revenues	$	595		$	3,395		$	1,637		$	7,345
Property Expenses	(282		)	(1,509		)	(703		)	(3,287		)
Impairment of Real Estate	(176		)	—			(176		)	(1,082		)
Depreciation and Amortization	(81		)	(937		)	(528		)	(2,281		)
Gain on Sale of Real Estate	13,481			1,415			10,407			7,614
Income from Discontinued Operations	$	13,537		$	2,364		$	10,637		$	8,309

At June 30, 2013 and December 31, 2012, we had notes receivable outstanding of approximately $40,938 and $41,201, net of a discount of $223 and $255, respectively, which are included as a component of Prepaid Expenses and Other Assets, Net. At June 30, 2013 and December 31, 2012, the fair value of the notes receivable was $42,144 and $44,783, respectively. The fair value of our notes receivable was determined by discounting the future cash flows using current rates at which similar notes with similar remaining maturities would be made to other borrowers. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value of our notes receivable was primarily based upon Level 3 inputs, as discussed below.

Impairment Charges

During the three and six months ended June 30, 2013 and 2012, we recorded the following net non-cash impairment charges:

	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012		Six Months Ended June 30, 2013		Six Months Ended June 30, 2012
Held for Sale and Sold Operating Properties — Discontinued Operations	$	176	$	—	$	176	$	1,082
Held for Use Operating Properties — Continuing Operations	1,429		—		1,429		19
Total Net Impairment	$	1,605	$	—	$	1,605	$	1,101

The impairment charges for assets that qualify to be classified as held for sale are calculated as the difference between the carrying value of the properties and the estimated fair value, less costs to sell. The impairment charges for assets held for use are calculated as the difference between the carrying value of the properties and the estimated fair value. The impairment charges recorded during the three and six months ended June 30, 2013 and 2012 were triggered primarily due to marketing certain properties for sale and our assessment of the likelihood and timing of a potential sale transaction.

The accounting guidance for the fair value measurement provisions for the impairment of long lived assets establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair market values were primarily determined using third party purchase contracts and offers.

The following table presents information about our real estate assets that were measured at fair value on a non-recurring basis during the six months ended June 30, 2013 and 2012. The table indicates the fair value hierarchy of the valuation techniques we utilized to determine fair value.

	Fair Value Measurements on a Non-Recurring Basis Using:
Description	At June 30,		Quoted Prices in Active Markets for Identical Assets (Level  1)	Significant Other Observable Inputs (Level 2)	Unobservable Inputs (Level 3)		Total Impairment for the Six Months Ended
Long-lived Assets Held and Used or Held for Sale - June 30, 2013	$	6,993	—	—	$	6,993	$	(1,605	)
Long-lived Assets Held for Sale - June 30, 2012*	$	24,069	—	—	$	24,069	$	(1,194	)
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* Excludes industrial properties for which an impairment reversal of $93 was recorded during the six months ended June 30, 2012 since the related assets are recorded at carrying value, which is lower than estimated fair value at June 30, 2012.

The following table presents quantitative information about the Level 3 fair value measurements at June 30, 2013 and 2012.

Quantitative Information about Level 3 Fair Value Measurements:
Description	Fair Value		Valuation Technique	Unobservable Inputs	Range
Four industrial properties comprising approximately 0.3 million square feet of GLA at June 30, 2013	$	6,993	3rd Party Pricing	(A)	N/A
Five industrial properties comprising approximately 1.8 million square feet of GLA at June 30, 2012	$	24,069	3rd Party Pricing	(A)	N/A

(A) The fair value for the properties is based upon the value of a third party purchase contract or letter of intent, which is subject to our corroboration for reasonableness.