OTHER ASSETS

Other Assets on the Balance Sheets as of September 30, 2012 and December 31, 2011 included the following (in thousands):



	September 30, 2012		December 31, 2011
Lease inducements, net of amortization of of $4,544 and $3,696 in 2012 and 2011, respectively	$	11,541	$	12,219
Investment in Verde Realty	5,380		5,868
FF&E and leasehold improvements, net of accumulated depreciation of $18,504 and $17,814 in 2012 and 2011, respectively	4,398		4,736
Loan closing costs, net of accumulated amortization of $2,421 and $4,026 in 2012 and 2011, respectively	3,976		1,435
Prepaid expenses and other assets	2,932		2,168
Predevelopment costs and earnest money	1,958		581
Intangible Assets:
In-place leases, net of accumulated amortization of $5,099 and $2,833 in 2012 and 2011, respectively	22,767		16,144
Goodwill	5,039		5,155
Above market leases, net of accumulated amortization of $9,369 and $8,845 in 2012 and 2011, respectively	7,157		4,414
	$	65,148	$	52,720

Investment in Verde Realty relates to a cost method investment in a privately-held real estate investment trust. In the third quarter of 2012, the Company reduced its investment in Verde Realty by $488,000 as a result of a merger of Verde into another real estate company. The Company expects to receive cash proceeds upon closing of this merger in the fourth quarter of 2012 of $5.4 million.

Goodwill relates entirely to the Office reportable segment. As office assets are sold, either by the Company or by joint ventures in which the Company has an ownership interest, goodwill is reduced. The following is a summary of goodwill activity for the nine months ended September 30, 2012 and September 30, 2011 (in thousands):



	Nine Months Ended September 30,
	2012			2011
Beginning balance	$	5,155		$	5,430
Allocated to property sales	(116		)	(275		)
Ending balance	$	5,039		$	5,155