Real Estate

9 Months Ended

Sep. 30, 2021

Acquisitions

On July 28, 2021, the Company acquired 725 Ponce, a 372,000 square foot office building in Midtown Atlanta, for $300.8 million, including acquisition costs. The Company accounted for this transaction as an acquisition of an asset, and the following table summarizes the allocation of the purchase price of this property (in thousands):


	725 Ponce
Tangible assets:
Operating properties	$	292,946
Tangible assets	292,946

Intangible assets:
In-place leases	12,788
Above market leases	1,770
Intangible assets	14,558

Intangible liabilities:
Above market leases	(6,739)
Intangible liabilities	(6,739)
Total net assets acquired	$	300,765

On September 27, 2021, the Company acquired a 0.15 acre land parcel in Atlanta for a gross purchase price of $3.1 million related to a potential future development in Midtown Atlanta.

On March 12, 2021, the Company acquired a 0.24 acre land parcel in Atlanta for a gross purchase price of $8.0 million that is held in a 95% owned consolidated joint venture.

In May 2020, the Company acquired a 1,550 space parking garage in Charlotte for a gross purchase price of $85.0 million. This property is included in real estate assets on the condensed consolidated balance sheet and in the Company's Charlotte/Other operating segment.

Subsequent to quarter end, on October 1, 2021, the Company acquired Heights Union, a 294,000 square foot office property in Tampa, for a gross purchase price of $144.8 million.

Dispositions

On July 23, 2021, the Company sold One South at the Plaza in Charlotte for a gross sales price of $271.5 million and a gain of $13.1 million.

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

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

During March 2020, the Company sold Hearst Tower, a 966,000 square foot office building in Charlotte, for a gross purchase price of $455.5 million. The Company recognized a gain of $90.4 million on the sale.

During February 2020, the Company sold Woodcrest, a 386,000 square foot office property in Cherry Hill, New Jersey, for a gross purchase price of $25.3 million. The Company acquired Woodcrest in a merger and did not record any gain or loss on the sale.

Held For Sale Buildings

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):


	December 31, 2020
Real estate assets and other assets held for sale
Operating property, net of accumulated depreciation of $8,123	$	106,864
Notes and accounts receivable	439
Deferred rents receivable	2,480
Intangible assets, net of accumulated amortization of $6,065	15,830
Other assets	133
Total real estate assets and other assets held for sale	$	125,746

Liabilities of real estate assets held for sale
Accounts payable and accrued expenses	$	7,399
Deferred income	44
Intangible liabilities, net of accumulated amortization of $1,205	3,014
Other liabilities	2,149
Total liabilities of real estate assets held for sale	$	12,606

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 value 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