Real Estate

6 Months Ended

Jun. 30, 2021

Acquisitions

On March 12, 2021, the Company acquired a 0.24 acre land parcel in Atlanta for a gross purchase price of $8 million which is held in a 95% owned consolidated joint venture.

Subsequent to June 30, 2021, on July 28, 2021, the Company acquired 725 Ponce, a 372,000 square foot office building in Midtown Atlanta, for a gross purchase price of $300.2 million.

Dispositions

On April 7, 2021, the Company sold Burnett Plaza in Fort Worth for a gross sales price of $137.5 million and recorded a loss of $19,000.

The Company had two dispositions of consolidated operating properties during the six months ended June 30, 2020. The Company sold the following properties in 2020 ($ in thousands):

Property

Property Type

Location

Square Feet

Sales Price

Hearst Tower

Office

Charlotte, NC

966,000

455,500

Woodcrest

Office

Cherry Hill, NJ

386,000

25,300

The Company sold the properties noted above as part of its ongoing business strategy, using the proceeds from the dispositions to fund new investment activity. The gain of $90.3 million from the sale of these two properties is net of $380,000 of estimated state income tax.

Subsequent to June 30, 2021, on July 1, 2021, the Company sold 0.7 acres of land in Tempe adjacent to our 100 Mill development to a hotel developer for $6.4 million. Net proceeds approximated our book value.

Held For Sale Buildings

The Company's One South at the Plaza property in Charlotte was classified as held for sale as of June 30, 2021 as the result of the Company accepting an offer for the sale of the property in the second quarter of 2021, and the Company's Burnett Plaza property in Fort Worth was classified as held for sale as of December 31, 2020 as the result of the Company accepting an offer for the sale of the property in the fourth quarter of 2020. The major classes of assets and liabilities of those properties held for sale were as follows (in thousands):


	June 30, 2021		December 31, 2020
Real estate assets and other assets held for sale
Operating property, net of accumulated depreciation of $25,902 and $8,123 in 2021 and 2020, respectively	$	247,034	$	106,864
Notes and accounts receivable	398		439
Deferred rents receivable	3,359		2,480
Intangible assets, net of accumulated amortization of $12,326 and $6,065 in 2021 and 2020, respectively	9,228		15,830
Other assets	228		133
Total real estate assets and other assets held for sale	$	260,247	$	125,746

Liabilities of real estate assets held for sale
Accounts payable and accrued expenses	$	2,985	$	7,399
Deferred income	110		44
Intangible liabilities, net of accumulated amortization of $4,512 and $1,205 in 2021 and 2020, respectively	6,527		3,014
Other liabilities	1,260		2,149
Total liabilities of real estate assets held for sale	$	10,882	$	12,606

Subsequent to quarter end, on July 23, 2021, the Company sold One South at the Plaza for a gross sales price of $271.5 million and an estimated gain of $13 million.

Impairment

The Company tests buildings held for investment for impairment whenever changes in circumstances indicate a building’s carrying value may not be recoverable. The test is conducted using undiscounted cash flows for the shorter of the building’s estimated hold period or its remaining useful life. When testing for recoverability of buildings held for investment, projected cash flows are used over its expected hold period. If the expected hold period includes some likelihood of shorter-term hold period from a potential sale, the probability of a sale is layered into the analysis. If any building's held for investment analysis were to fail the impairment test, its book value would be written down to its then current estimated fair value, before any selling expense, and that building would continue to depreciate over its remaining useful life. None of the Company’s held for investment buildings were impaired during any periods presented in the accompanying statement of operations while under the held for investment classification.

The Company also reviews held for sale assets for impairments. If book value is in excess of estimated fair value less estimated selling costs, we impair those assets to fair value less estimated selling costs. There were no held for sale buildings impaired during any periods presented in the accompanying statements of operations.

The Company may record additional impairment charges in future periods if operating results of individual buildings are materially different from our forecasts, the economy and the office industry weakens, or we shorten our contemplated holding period for additional buildings