Real Estate Assets

9 Months Ended

Aug. 31, 2016

Real Estate Assets

Real Estate Assets

3.    Real Estate Assets

Real estate assets, net consist of:

	Estimated
	Useful Lives	Aug. 31, 2016		Nov. 30, 2015
Land		$	17,989	$	18,157
Land improvements	10 to 30 years		27,486		22,440
Buildings and improvements	10 to 40 years		163,438		149,111
Tenant improvements	Shorter of useful life or terms of related lease		21,498		19,611
Machinery and equipment	3 to 20 years		11,022		11,810
Construction in progress			1,446		10,240
Development costs			16,156		15,870
			259,035		247,239
Accumulated depreciation			(85,040)		(80,784)
		$	173,995	$	166,455

Total depreciation expense and capitalized interest related to real estate assets were as follows:

	For the Three Months Ended				For the Nine Months Ended
	Aug. 31, 2016		Aug. 31, 2015		Aug. 31, 2016		Aug. 31, 2015
Depreciation expense	$	1,974	$	1,619	$	5,756	$	4,765
Capitalized interest	$	57	$	290	$	274	$	657

In the fiscal 2013 fourth quarter, Griffin completed the sale of approximately 90 acres of undeveloped land for $8,968 in cash, before transaction costs (the “Windsor Land Sale”). The land sold is located in Windsor, Connecticut and is part of an approximately 253 acre parcel of undeveloped land that straddles the town line between Windsor and Bloomfield, Connecticut. Under the terms of the Windsor Land Sale, Griffin and the buyer were each required to construct roadways connecting the land parcel sold with existing town roads. The roads constructed by the buyer and the road being constructed by Griffin will become new town roads, thereby providing public access to the remaining acreage in Griffin’s land parcel. As a result of Griffin's continuing involvement with the land sold, the Windsor Land Sale is being accounted for under the percentage of completion method. Accordingly, the revenue and pretax gain on the sale are being recognized on a pro rata basis in a ratio equal to the percentage of the total costs incurred to the total anticipated costs of sale, including costs of the required roadwork. Costs included in determining the percentage of completion include the cost of the land sold, allocated master planning costs and the cost of road construction.

As of August 31, 2016, approximately 97% of the total costs related to the Windsor Land Sale have been incurred; therefore, from the date of the Windsor Land Sale through August 31, 2016, approximately 97% of the total revenue and pretax gain on the sale have been recognized in Griffin’s consolidated statements of operations. In the 2016 second quarter, Griffin increased its estimate of the total costs to complete the required road improvements attributed to the Windsor Land Sale by $79, based upon changes received from the state of Connecticut’s Department of Transportation in the 2016 second quarter that increased the scope of roadwork required to be completed by Griffin. The effect of the estimated additional roadwork cost is expected to reduce the estimated total pretax gain on the Windsor Land Sale from approximately $6,765 to approximately $6,686 after all costs are incurred. From the time the Windsor Land Sale closed in fiscal 2013 through August 31, 2016, Griffin’s consolidated statements of operations reflected total revenue of $8,729 and a total pretax gain of $6,508 from the Windsor Land Sale. Griffin's consolidated statements of operations for the 2015 third quarter and 2015 nine month period included revenue of $1,176 and $2,247, respectively, and a pretax gain of $1,014 and $1,763, respectively, from the Windsor Land Sale. The balance of the revenue and pretax gain on sale will be recognized when the remaining costs are incurred, which is expected to be in the fourth quarter of fiscal 2016. Deferred revenue on Griffin's consolidated balance sheet as of August 31, 2016 includes $239 related to the Windsor Land Sale that will be recognized as the remaining costs are incurred. While management has used its best estimates, based on industry knowledge and experience, in projecting the total costs of the required roadways being constructed, increases or decreases in future costs as compared with current estimated amounts would reduce or increase the gain recognized in future periods.

Real estate assets held for sale consist of:

	Aug. 31, 2016		Nov. 30, 2015
Land	$	246	$	78
Development costs		1,341		1,340
	$	1,587	$	1,418