Transaction Related Costs, Impairment Losses and Other

9 Months Ended

Sep. 30, 2019

The following table sets forth the details of transaction related costs, impairment losses and other:



(Amounts in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
Transaction related costs	$	1,576	$	2,510	$	1,955	$	3,580
Non-cash impairment losses, substantially 608 Fifth Avenue (see below)	—		—		101,360		—
Transfer tax⁽¹⁾	—		—		—		13,103
	$	1,576	$	2,510	$	103,315	$	16,683

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(1)	Disputed additional Transfer Tax recorded in the first quarter 2018 related to the December 2012 acquisition of Independence Plaza. The joint venture, in which we have a 50.1% economic interest, that owns Independence Plaza recorded this expense based on the precedent established by the Tax Tribunal's decision regarding One Park Avenue (see Note 5 - Real Estate Fund Investments).

608 Fifth Avenue

During the second quarter of 2019, Arcadia Group US Ltd ("Arcadia Group"), the operator of Topshop, our retail tenant at 608 Fifth Avenue, filed for Chapter 15 bankruptcy protection in the United States. On June 28, 2019, Arcadia Group closed all of its stores in the United States. 608 Fifth Avenue is subject to a land and building lease which expires in 2033. The non-recourse lease calls for fixed lease payments through the term, plus payments for real estate taxes, insurance and operating expenses. Based on current market rental rates, the cash flows of the property would not be sufficient to cover the operating expenses, including the fixed lease payments. Consequently, we concluded that the carrying amount of the property, which includes our right-of-use asset, was not recoverable resulting in a write-down to zero. Our estimate of fair value of the property was derived from a discounted cash flow model based upon market conditions and expectations of growth. We recognized a $93,860,000 non-cash impairment loss on our consolidated statements of income in the second quarter of 2019, of which $75,220,000 resulted from the impairment of our right-of-use asset. As of September 30, 2019, a $72,088,000 lease liability remains, which will be recognized as income when the non-recourse lease is terminated. In August 2019, we delivered the required nine month notice to the ground lessor that we will terminate the lease in May 2020.