Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures |
Details comprising loss from discontinued operations activity on 1441 West Long Lake Road in Troy, Michigan, 11109 Sunset Hills Road in Reston, Virginia, and 1200 Enclave Parkway in Houston, Texas for the three and nine months ended ended September 30, 2016 and 2015 are presented below (in thousands):
| | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, 2016 | | September 30, 2015 | | September 30, 2016 | | September 30, 2015 | Revenues: | | | | | | | | Rental income | $ | — |
| | $ | 19 |
| | $ | — |
| | $ | 19 |
| Tenant reimbursements | — |
| | — |
| | — |
| | (3 | ) | | — |
| | 19 |
| | — |
| | 16 |
| Expenses: | | | | | | | | Property operating costs | — |
| | 3 |
| | — |
| | 2 |
| General and administrative | (1 | ) | | — |
| | — |
| | 1 |
| | (1 | ) | | 3 |
| | — |
| | 3 |
| | | | | | | | | Operating income | 1 |
| | 16 |
| | — |
| | 13 |
| Loss on sale of real estate assets | — |
| | (2 | ) | | — |
| | (2 | ) | Income from discontinued operations | $ | 1 |
| | $ | 14 |
| | $ | — |
| | $ | 11 |
|
Properties sold during the nine months ended September 30, 2016 and 2015 did not meet the criteria to be reported as discontinued operations. The operational results for these properties prior to their sale dates are presented as continuing operations in the accompanying consolidated statements of income, and the gain/(loss) on sale is presented separately on the face of the income statement. Details of such properties sold are presented below (in thousands):
| | | | | | | | | | | | | | | Buildings Sold(1) | | Location | | Date of Sale | | Gain/(Loss) on Sale | | Net Sales Proceeds | | 3900 Dallas Parkway | | Plano, Texas | | January 30, 2015 | | $ | 10,073 |
| | $ | 25,803 |
| | 5601 Headquarters Drive | | Plano, Texas | | April 28, 2015 | | $ | 7,959 |
| | $ | 33,326 |
| | River Corporate Center | | Tempe, Arizona | | April 29, 2015 | | $ | 5,297 |
| | $ | 24,223 |
| | Copper Ridge Center | | Lyndhurst, New Jersey | | May 1, 2015 | | $ | 13,711 |
| | $ | 50,372 |
| (2) | Eastpoint I & II | | Mayfield Heights, Ohio | | July 28, 2015 | | $ | (177 | ) | | $ | 17,342 |
| | 3750 Brookside Parkway | | Alpharetta, Georgia | | August 10, 2015 | | $ | 1,406 |
| | $ | 13,624 |
| | Chandler Forum | | Chandler, Arizona | | September 1, 2015 | | $ | 15,506 |
| | $ | 32,267 |
| | 1055 East Colorado | | Pasadena, California | | April 21, 2016 | | $ | 31,501 |
| | $ | 60,076 |
| | Fairway Center II | | Brea, California | | April 28, 2016 | | $ | 15,468 |
| | $ | 33,063 |
| | 1901 Main Street | | Irvine, California | | May 2, 2016 | | $ | 32,016 |
| | $ | 63,149 |
| (3) | 9221 Corporate Boulevard | | Rockville, Maryland | | July 27, 2016 | | $ | (191 | ) | | $ | 12,037 |
| | 150 West Jefferson | | Detroit, Michigan | | July 29, 2016 | | $ | 134 |
| | $ | 78,642 |
| | 9200 and 9211 Corporate Boulevard | | Rockville, Maryland | | September 28, 2016 | | $ | — |
| (4) | $ | 12,535 |
| |
| | (1) | The dispositions of Aon Center in Chicago, Illinois on October 29, 2015, and 2 Gatehall Drive in Parsippany, New Jersey on December 21, 2015 has impacted the comparative analysis of operating results for the three and nine months ended September 30, 2016. |
| | (2) | As part of the transaction, Piedmont accepted a secured promissory note from the buyer for $45.4 million. During the nine months ended September 30, 2016, the note receivable was repaid in full and such proceeds are reflected in the accompanying consolidated statements of cash flows as net sales proceeds from the sale of wholly-owned properties. |
| | (3) | As part of the transaction, Piedmont accepted a secured promissory note from the buyer for $33.0 million; however, the note receivable was repaid in full by September 30, 2016. As such, the full proceeds from the sale of the property are reflected in the accompanying consolidated statements of cash flows as net sales proceeds from the sale of wholly-owned properties. |
| | (4) | As discussed in Note 8 above, Piedmont recognized an impairment loss of approximately $22.6 million during the three months ended September 30, 2016. As the sale was consummated within the same quarter, there was no gain or loss recognized upon the sale. |
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Disclosure of Long Lived Assets Held-for-sale |
Piedmont recorded impairment loss on real estate assets for the three and nine months ended September 30, 2016 and 2015, respectively, as follows (in thousands):
| | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | 2016 | | 2015 | | 2016 | | 2015 | Eastpoint I & II (1) | $ | — |
| | $ | — |
| | $ | — |
| | $ | 5,354 |
| 2 Gatehall Drive (1) | — |
| | 34,815 |
| | — |
| | 34,815 |
| 150 West Jefferson(1) | — |
| | — |
| | 5,972 |
| | — |
| 9221 Corporate Boulevard (2) | — |
| | — |
| | 2,336 |
| | — |
| 9200 and 9211 Corporate Boulevard(3) | 22,590 |
| | — |
| | 22,590 |
| | — |
| Total impairment loss on real estate assets(4) | $ | 22,590 |
| | $ | 34,815 |
| | $ | 30,898 |
| | $ | 40,169 |
|
| | (1) | Piedmont recognized an impairment loss on real estate assets based upon the difference between the carrying value of the asset and the contracted sales price, less estimated selling costs. |
| | (2) | Piedmont, using a probability-weighted model heavily weighted towards the short-term sale of the 9221 Corporate Boulevard building in Rockville, Maryland, determined that the carrying value would not be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. As a result, Piedmont recognized a loss on impairment of approximately $2.3 million during the nine months ended September 30, 2016 calculated as the difference between the carrying value of the asset and the anticipated contract sales price, less estimated selling costs. |
| | (3) | Piedmont elected to sell its remaining two assets and exit the Rockville, Maryland sub-market of Washington, D.C, after selling the 9221 Corporate Boulevard building in July 2016 (mentioned above). Upon management's change in its hold period assumption for the assets from a long-term hold to a near-term sale, Piedmont recognized an impairment loss of approximately $22.6 million. The impairment loss was calculated as the difference between the carrying value of the asset and the anticipated contracted sales price, less estimated selling costs. Piedmont reclassified the properties as held for sale, recognized an impairment loss, entered into a binding contract, and subsequently sold the 9200 and 9211 Corporate Boulevard buildings during the three months ended September 30, 2016. |
| | (4) | The fair value measurements used in the evaluation of the non-financial assets above are considered to be Level 1 valuations within the fair value hierarchy as defined by GAAP, as there are direct observations and transactions involving the assets by unrelated, third-party purchasers. |
Details of amounts held for sale as of December 31, 2015 are presented below (in thousands):
| | | | | | | | | | | | September 30, 2016 | | December 31, 2015 | Real estate assets held for sale, net: | | | | | Land | | $ | — |
| | $ | 9,759 |
| Building and improvements, less accumulated depreciation of $0 and $32,162 as of September 30, 2016 and December 31, 2015, respectively | | — |
| | 66,840 |
| Construction in progress | | — |
| | 15 |
| Total real estate assets held for sale, net | | $ | — |
| | $ | 76,614 |
| | | | | | Other assets held for sale, net: | | | | | Straight-line rent receivables | | $ | — |
| | $ | 4,729 |
| Prepaid expenses and other assets | | — |
| | 66 |
| Deferred lease costs, less accumulated amortization of $0 and $1,162 as of September 30, 2016 and December 31, 2015, respectively | | — |
| | 3,695 |
| Total other assets held for sale, net | | $ | — |
| | $ | 8,490 |
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