3. Real Estate Assets

Real estate assets consist of:


	Estimated
	Useful Lives	Feb. 29, 2020		Nov. 30, 2019
Land		$	31,886	$	30,750
Land improvements	10 to 30 years		44,913		40,992
Buildings and improvements	10 to 40 years		228,520		220,086
Tenant improvements	Shorter of useful life or terms of related lease		30,974		30,318
Machinery and equipment	3 to 20 years		10,958		7,557
Construction in progress			6,181		3,542
Development costs			4,632		10,404
			358,064		343,649
Accumulated depreciation			(117,569)		(105,035)
		$	240,495	$	238,614

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


	For the Three Months Ended
	Feb. 29, 2020		Feb. 28, 2019
Depreciation expense	$	2,863	$	2,591

Capitalized interest	$	—	$	42

Real estate assets held for sale consist of:


	Feb. 29, 2020		Nov. 30, 2019
Land	$	529	$	323
Land improvements		269		388
Buildings and improvements		—		417
Development costs		6,698		1,009
	$	7,496	$	2,137

On February 18, 2020, Griffin, through a consolidated VIE, purchased 3320 Maggie for $7,921, including acquisition costs. Griffin provided all of the funding to the VIE to purchase 3320 Maggie and determined that the fair value of the assets acquired approximated the purchase price. Of the $7,921 purchase price, $7,078 represented the fair value of real estate assets and $843 represented the fair value of the acquired intangible assets, comprised of the values of the in-place lease at the time of acquisition and the associated tenant relationship (see Notes 2 and 8). These fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding fair values becomes available. The intangible assets are included in other assets on Griffin’s consolidated balance sheet. The fair value of the real estate assets primarily reflects the building and land improvements that are being depreciated principally over forty years and building and tenant improvements that are being depreciated over a period of five to twenty years. The intangible assets are being amortized over a period of five to ten years.

The acquisition of 3320 Maggie was made utilizing a Reverse 1031 Like-Kind Exchange that was entered into at closing. As such, as of February 29, 2020, 3320 Maggie is in the possession of a qualified intermediary engaged to execute the Reverse 1031 Like-Kind Exchange until the sale transaction and the Reverse 1031 Like-Kind Exchange are completed. Griffin retains essentially all of the legal and economic benefits and obligations related to 3320 Maggie prior to the completion of the Reverse 1031 Like-Kind Exchange. Accordingly, 3320 Maggie is included in Griffin’s consolidated financial statements as a consolidated VIE until legal title is transferred to Griffin upon completion of the Reverse 1031 Like-Kind Exchange.

In the 2020 first quarter, real estate assets held for sale increased by $5,359, reflecting: (a) an increase of $6,543 from real estate assets, net, transferred into real estate assets held for sale as a result of entering into agreements to sell such real estate; partially offset by (b) a decrease of $1,084 from real estate assets held for sale being transferred back into real estate assets, net, as a result of the termination of agreements to sell such real estate assets; and (c) a reduction of $100 for a property sale that closed. The real estate assets held for sale that were returned to real estate assets, net, in the 2020 first quarter were Griffin’s farm in Quincy, Florida and the approximately 7,200 square foot restaurant building in Griffin Center in Windsor, Connecticut. Expenses of $30 related to the terminated sale agreements are included in costs related to property sales in the 2020 first quarter.