Property Transactions

12 Months Ended

Dec. 31, 2011

Property Transactions [Abstract]

PROPERTY TRANSACTIONS

8. PROPERTY TRANSACTIONS

Discontinued Operations

Accounting rules require that the historical operating results of held-for-sale or sold assets which meet certain accounting rules be included in a separate section, Discontinued Operations, in the Statements of Operations for all periods presented. If the asset is sold, the related gain or loss on sale is also included in Discontinued Operations. The following properties which were sold in 2011 met the criteria for discontinued operations presentation ($ in thousands):

	September 30,	September 30,		September 30,		September 30,
Property	Property Type	Location	Square Feet		Sales Price
2011:
King Mill Distribution Park — Building 3	Industrial	Atlanta, GA		796,000	$	28,300
Lakeside Ranch Business Park — Building 20	Industrial	Dallas, TX		749,000		28,400
One Georgia Center	Office	Atlanta, GA		376,000		48,600
Jefferson Mill Business Park — Building A	Industrial	Atlanta, GA		459,000		22,000
2010:
8995 Westside Parkway	Office	Atlanta, GA		51,000		3,200
San Jose MarketCenter	Retail	San Jose, CA		213,000		85,000

The following table details the components of Income (Loss) from Discontinued Operations for the years ended December 31, 2011, 2010 and 2009 (in thousands):

		September 30,			September 30,			September 30,
	2011			2010			2009
Rental property revenues	$	11,115		$	17,806		$	21,543
Other income		98			35			53
Rental property operating expenses		(4,474	)		(6,515	)		(8,571	)
Depreciation expense		(3,887	)		(6,643	)		(8,052	)
Interest expense		—			—			(1,634	)
Income from discontinued operations	$	2,852		$	4,683		$	3,339

Gains (loss) related to the sales of investment properties included in Discontinued Operations are as follows for the years ended December 31, 2011, 2010 and 2009 (in thousands):

		September 30,			September 30,		September 30,
	2011			2010		2009
King Mill Distribution Park — Building 3	$	4,977		$	—	$	—
One Georgia Center		2,805			—		—
Lakeside Ranch Business Park — Building 20		1,121			—		—
Jefferson Mill Business Park — Building A		(394	)		—		—
San Jose MarketCenter		10			6,572		—
8995 Westside Parkway		—			654		—
Other		—			—		147
Gain on sale of investment properties — discontinued operations	$	8,519		$	7,226	$	147
Gain on extinguishment of debt — San Jose MarketCenter	$	—		$	—	$	12,498

Purchases of Investment Property

In November 2011, the Company purchased Promenade, a 775,000 square foot office building in the midtown submarket of Atlanta, Georgia, for a cash purchase price of $134.7 million. The purchase price was funded through proceeds from asset sales and borrowings under the Company’s Credit Facility. The Company allocated the purchase price based on the fair value of assets and liabilities acquired, in accordance with applicable accounting rules. The Company incurred approximately $292,000 in acquisition costs related to the purchase, which are recorded in Other Expense on the Statement of Operations.

The following table summarizes the fair value of the assets and liabilities acquired (in thousands):

		September 30,
Land	$	13,439
Building		94,190
Tenant Improvements and FF&E		8,600
Tangible assets		116,229
Intangible Assets:
Above-market leases		3,991
In-place leases		16,172
Total intangible assets		20,163
Intangible Liabilities:
Below-market leases		(1,659	)
Total net assets acquired	$	134,733

See Note 10 for a schedule of the timing of amortization of the intangible assets and liabilities and the weighted average amortization periods.

Recognition of Deferred Gain

In 2006, the Company and Prudential entered into an agreement whereby the Company contributed interests in five operating properties it owned to a venture, CPV IV, and Prudential contributed an equal amount of cash. The venture was structured such that the operating properties were owned by CP Venture Five LLC (“CPV Five”), and the cash was held by CP Venture Six LLC (“CPV Six”), both of which are wholly-owned by CPV IV. The Company accounts for its interest in CPV Five under the equity method (see Note 4), and the Company consolidates CPV Six. The Company determined that the transaction qualified for accounting purposes as a sale of the properties to the venture. However, because the legal consideration the Company received from this transaction was a controlling interest in CPV Six as opposed to cash, the Company determined that the gain on the transaction should be deferred. In 2009, CPV Six distributed cash to its partners which exceeded the 10% threshold for gain recognition, and the Company recognized $167.2 million of previously deferred gain as gain on sale of investment properties.