Real Estate Assets

12 Months Ended

Dec. 03, 2011

Real Estate Assets

Real Estate Assets

7. Real Estate Assets

        Real estate assets consist of:

	Estimated Useful Lives	December 3, 2011			November 27, 2010
Land		$	10,435		$	12,521
Land improvements	10 to 30 years		14,037			14,007
Buildings and improvements	10 to 40 years		117,120			128,437
Tenant improvements	Shorter of useful life or terms of related lease		14,104			13,922
Development costs			12,464			10,108
			168,160			178,995
Accumulated depreciation			(51,865	)		(48,165	)
		$	116,295		$	130,830

        On January 8, 2010, Griffin Land closed on the purchase of a 120,000 square foot industrial building in Breinigsville, Pennsylvania. Griffin Land paid $6.4 million in cash for the building, including approximately $1.0 million paid as a deposit in the 2009 fourth quarter. The building is located in a major industrial area of Pennsylvania's Lehigh Valley and is currently under a full building lease to Olympus Corporation of the Americas ("Olympus"). Griffin Land incurred approximately $0.3 million of acquisition costs on the purchase of this building, which are included in selling, general and administrative expenses on Griffin's consolidated statement of operations in fiscal 2010. Subsequent to the purchase of this building, Griffin Land completed a lease amendment with Olympus that extends the lease term through 2025. On January 29, 2010, Griffin closed on a $4.3 million nonrecourse mortgage on this building (see Note 12). This was Griffin Land's first real estate purchase outside of the Hartford, Connecticut market, where Griffin Land's core real estate holdings are located.

        Based on an independent appraisal of the building acquired, Griffin determined that the fair value of the assets acquired approximated the purchase price. Of the $6.4 million purchase price, approximately $5.4 million represented the fair value of the real estate assets and approximately $1.0 million represented the fair value of the acquired intangible assets, comprised of the value of the in-place lease at the time of purchase and a tenant relationship intangible asset. The intangible assets are included in other assets on Griffin's consolidated balance sheet.

        On March 17, 2010, Griffin Land closed on the purchase of approximately 51 acres of undeveloped land in Lower Nazareth, Pennsylvania. The purchase price was $1.8 million plus acquisition expenses, with approximately $0.3 million paid as a deposit in the 2009 fourth quarter. The undeveloped land is located in a major industrial area of Pennsylvania's Lehigh Valley and has approvals for the development of two industrial buildings totaling approximately 530,000 square feet.

        Included in real estate assets, net as of December 3, 2011 and November 27, 2010 was $2,161 and $2,458, respectively, reflecting the net book value of Imperial's Florida farm that was shut down during fiscal 2009 and is being leased to another landscape nursery grower (see Notes 15 and 16).

        Griffin capitalized interest in fiscal 2011 and fiscal 2009 of $134 and $181, respectively. There was no capitalized interest in fiscal 2010. Total depreciation expense related to real estate assets in fiscal 2011, fiscal 2010 and fiscal 2009 was $5,632, $5,837 and $5,024, respectively.

        Real estate assets held for sale consist of:

	Estimated Useful Lives	December 3, 2011			November 27, 2010
Land		$	1,911		$	57
Land improvements	10 to 30 years		4			—
Buildings and improvements	10 to 40 years		11,855			—
Development costs			1,151			1,151
			14,921			1,208
Accumulated depreciation			(1,932	)		—
		$	12,989		$	1,208

        At November 27, 2010, real estate assets were disaggregated for note disclosure purposes between assets held for lease and assets held for sale of $122,924 and $9,114, respectively. Assets presented as held for sale within the above table for 2010 included assets held for sale and assets held for development with the ultimate expectation that they would be sold. In fiscal 2011, assets considered as held for development and previously presented within the held for sale caption are now presented within the broader category of Real Estate Assets and, accordingly, Real Estate Held for Sale consists only of assets held for sale as described under Real Estate Assets in Note 1, Summary of Significant Accounting Policies. As of December 3, 2011, prior year amounts have been reclassified to conform to the current presentation.

        On January 31, 2012, Griffin Land closed on the sale of its warehouse building in Manchester, Connecticut to an affiliate of Raymour & Flanigan ("Raymour"), the tenant that leases the entire building. In the 2011 fourth quarter, Griffin Land gave notice to Raymour that Griffin Land was exercising the put option under its lease with Raymour to sell the facility to Raymour for $16.0 million. Griffin Land expects to record a gain on this sale in the 2012 first quarter. Accordingly, the building, which had a carrying cost of approximately $11.8 million at December 3, 2011 was classified as real estate held for sale as of December 3, 2011.