Real Estate

3 Months Ended

Mar. 31, 2022

Real Estate [Abstract]

REAL ESTATE

REAL ESTATE

Acquisitions

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.

Subsequent to quarter end, on April 21, 2022 the Company purchased its partner's 10% joint venture interest in Avalon, which consists of both the 8000 and 10000 Avalon office properties. This transaction did not result in a change in control and any difference between the purchase price of $43.4 million and the $15.8 million book value of the outside partner's non-controlling interest on our consolidated balance sheet is recorded in the Company's additional paid in capital in the equity section of our balance sheet. The Company's consolidated basis in Avalon's assets and liabilities will remain unchanged from this transaction.

Impairment

The Company tests buildings held-for-investment, by disposal groups, for impairment whenever changes in circumstances indicate a disposal group’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, if any, 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 also reviews land and projects under development for impairment whenever changes in circumstances indicate the assets' carrying value may not be recoverable. None of the Company's investments in land or projects under development were impaired during any periods presented in the accompanying statement of operations.

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