ACQUIRED IN-PLACE LEASES AND ABOVE/BELOW MARKET LEASES

12 Months Ended

Dec. 31, 2012

ACQUIRED IN-PLACE LEASES AND ABOVE/BELOW MARKET LEASES

NOTE 4. ACQUIRED IN-PLACE LEASES AND ABOVE/BELOW MARKET LEASES

The following summarizes our acquired lease intangibles, which are included in prepaid expenses and other assets and other liabilities and deferred credits (in thousands):

	December 31, 2012			December 31, 2011
In-place leases	$	72,598		$	57,843
Accumulated amortization		(38,290	)		(28,981	)
Above market leases		32,846			32,820
Accumulated amortization		(21,363	)		(16,284	)
Acquired lease intangible assets, net	$	45,791		$	45,398
Below market leases	$	80,071		$	68,958
Accumulated accretion		(25,721	)		(20,346	)
Acquired lease intangible liabilities, net	$	54,350		$	48,612

The value allocated to in-place leases is amortized over the related lease term as depreciation and amortization expense in the statement of income. Above and below market leases are amortized over the related lease term as additional rental income for below market leases or a reduction of rental income for above market leases in the statement of income. Rental income (loss) included net amortization from acquired above and below market leases of $(0.2) million, $(1.1) million and $(1.1) million in 2012, 2011 and 2010, respectively. The remaining weighted-average amortization period as of December 31, 2012, is 6.4 years, 4.7 years and 12.1 years for in-place leases, above market leases and below market leases, respectively. Below market leases include $21.6 million related to below market renewal options, and the weighted-average period prior to the commencement of the renewal options is 10.8 years.

Increases (decreases) in net income as a result of amortization of our in-place leases, above market leases and below market leases are as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
Amortization of in-place leases	$	(10,248	)	$	(8,859	)	$	(3,388	)
Amortization of above market leases		(5,739	)		(5,684	)		(2,874	)
Amortization of below market leases		5,502			4,567			1,802
Net loss	$	(10,485	)	$	(9,976	)	$	(4,460	)

As of December 31, 2012, the amortization for acquired in-place leases during the next five years and thereafter, assuming no early lease terminations, is as follows (in thousands):

	In-Place Leases		Above Market Leases		Below Market Leases
Year Ending December 31,
2013	$	8,810	$	3,727	$	5,836
2014		6,047		2,296		5,119
2015		5,085		1,885		4,779
2016		4,187		1,360		4,609
2017		3,368		986		4,200
Thereafter		6,811		1,229		29,807
	$	34,308	$	11,483	$	54,350