Purchase of Investment Property

In the third quarter of 2012, the Company purchased 2100 Ross Avenue, a 844,000 square foot Class-A office building in the Arts District submarket of Dallas, Texas, and paid cash of $59.2 million. In addition, the Company assumed $4.2 million in liabilities associated with the building including tenant improvement liabilities, property tax liabilities, and deferred revenue. In accordance with applicable accounting rules, the Company included these assumed liabilities in the purchase price of the asset. The Company allocated the purchase price among the assets and liabilities acquired based on their respective fair values. The the three months ended September 30, 2012, the Company incurred approximately $369,000 in acquisition costs in conjunction with the purchase, which were recorded in Other Expense in the Statement of Operations. The following table summarizes the fair value of the assets and liabilities acquired (in thousands):



Tangible assets:
Land and improvements	$	5,987
Building	36,705
Tenant improvements	9,034
Tangible assets	51,726

Intangible assets:
Above-market leases	3,267
In-place leases	8,888
Total intangible assets	12,155

Intangible Liabilities:
Below-market leases	(436		)

Total net assets acquired	$	63,445

Discontinued Operations

Accounting rules require that the gains and losses from the disposition of certain real estate assets and related historical results of operations of certain sold or held-for-sale assets be included in a separate section, Discontinued Operations, in the Statements of Operations for all periods presented. In addition, assets and liabilities of held-for-sale properties, as defined, are required to be separately categorized on the Balance Sheet in the period that those properties are deemed held for sale.

In October 2012, the Company sold Cosmopolitan Center for $7.0 million. The Avenue Webb Gin and The Avenue Forsyth are under contract and are anticipated to close in the fourth quarter of 2012. In accordance with accounting guidance, these three properties were categorized as Operating Properties Held for Sale on the accompanying Balance Sheet at September 30, 2012. The operating results of sold and held-for-sale assets are presented in Discontinued Operations on the accompanying Statement of Operations for each of the periods presented.

In September 2012, the Company sold its third party management and leasing business to Cushman & Wakefield. Under the terms of the agreement, the Company has the potential to receive up to $15.4 million in gross sales proceeds, of which approximately 63.5% was received at closing. The final purchase price is subject to working capital adjustments, an earn out based on the performance of the contributed management and leasing contracts, and the potential contribution of additional management and/or leasing contracts, all of which the Company expects to be substantially resolved by October 1, 2013. The Company recognized a gain on this transaction of $7.4 million and will recognize additional gains if and when additional consideration is earned. As a result of this sale, the operations of the Company's third party management and leasing business are presented as Discontinued Operations on the accompanying Statements of Operations for each of the periods presented.

In the second quarter of 2012, the Company sold The Avenue Collierville ("Collierville"), a 511,000 square foot retail center in suburban Memphis, Tennessee, for $55.0 million and Galleria 75, a 111,000 square foot office building in Atlanta, Georgia, for $9.2 million. In the first quarter of 2011, the Company sold Jefferson Mill Business Park Building A, a 459,000 square foot industrial property in suburban Atlanta, Georgia, for $22.0 million. These transactions met the criteria for discontinued operations. Accordingly, the operating results are included in Discontinued Operations on the accompanying Statements of Operations for each of the periods presented.

The components of Discontinued Operations and the gains and losses on sales for the three and nine months ended September 30, 2012 and 2011 are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Income from discontinued operations:
Rental property revenues	$	5,055		$	10,519		$	18,969		$	31,720
Third party management and leasing revenues	4,789			5,398			15,528			14,091
Other income	267			1			472			115
Rental property expenses	(1,508		)	(4,391		)	(6,001		)	(12,237		)
Third party management and leasing expenses	(4,260		)	(4,241		)	(13,167		)	(12,414		)
Depreciation and amortization	(2,575		)	(4,650		)	(8,622		)	(14,721		)
Impairment loss	—			—			(12,233		)	—
Other expense	(8		)	(17		)	(39		)	(51		)
Income (loss) from discontinued operations	$	1,760		$	2,619		$	(5,093	)	$	6,503

Gain (loss) on sale of discontinued operations:
Galleria 75	$	—		$	—		$	547		$	—
One Georgia Center	—			2,821			—			2,821
Jefferson Mill Business Park Building A	—			—			—			(394		)
Third party management and leasing business	7,384			—			7,384			—
Other	60			—			273			10
Gain on sale of discontinued operations	$	7,444		$	2,821		$	8,204		$	2,437

Impairment Loss

In connection with the disposition of Collierville, the Company recorded an impairment loss of $12.2 million in the first quarter of 2012. This impairment is considered to be a Level 3 determination under the fair value rules, as unobservable market inputs were used. Collierville was owned by a consolidated joint venture, and the noncontrolling partner's share of the impairment loss was $2.0 million, which was recorded in Net Loss (Income) Attributable to Noncontrolling Interests in the 2012 Statement of Operations.