6. OTHER ASSETS

Other Assets on the Balance Sheets as of September 30, 2011 and December 31, 2010 included the following (in thousands):


	September 30, 2011		December 31, 2010
Investment in Verde Realty	$	5,868	$	9,376
FF&E and leasehold improvements, net of accumulated depreciation of $17,399 and $16,117 in 2011 and 2010, respectively		4,923		4,673
Predevelopment costs and earnest money		1,935		7,039
Lease inducements, net of accumulated amortization of $3,584 and $2,991 in 2011 and 2010, respectively		12,610		11,899
Loan closing costs, net of accumulated amortization of $4,043 and $3,109 in 2011 and 2010, respectively		1,591		2,703
Prepaid expenses and other assets		3,067		2,296
Intangible Assets:
Goodwill		5,155		5,430
Above market leases, net of accumulated amortization of $8,769 and $8,741 in 2011 and 2010, respectively		499		526
In-place leases, net of accumulated amortization of $2,545 and $2,492 in 2011 and 2010, respectively		268		322

	$	35,916	$	44,264

Investment in Verde Realty (“Verde”) relates to a cost method investment in a non-public real estate investment trust. During the first quarter of 2011, the Company determined that there were impairment indicators related to its investment in Verde, including Verde’s withdrawal of its proposed initial public offering. The Company estimated the fair value of Verde by calculating discounted future cash flows using Level 3 inputs, such as market capitalization rates, discount rates and other items. The fair value estimate was less than carrying value, and the Company determined the impairment was other-than-temporary in accordance with accounting standards for investments in unconsolidated entities. Accordingly, the Company recorded an impairment loss of $3.5 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, a portion of goodwill is written off to the cost of each sale. The following is a summary of goodwill activity for the nine months ended September 30, 2011, and there were no changes for the nine month 2010 period (see Note 9 for additional information regarding property sales):


Balance at December 31, 2010	$	5,430
Allocated to property sale		(275	)

Balance at September 30, 2011	$	5,155