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Other Assets

12 Months Ended

Dec. 31, 2011

10. OTHER ASSETS

At December 31, 2011 and 2010, Other Assets included the following (in thousands):

		September 30,		September 30,
	2011		2010

Investment in Verde Realty	$	5,868	$	9,376
FF&E and leasehold improvements, net of accumulated depreciation of $17,814 and $16,117 in 2011 and 2010, respectively		4,736		4,673
Predevelopment costs and earnest money		581		7,039
Lease inducements, net of accumulated amortization of $3,696 and $2,991 in 2011 and 2010, respectively		12,219		11,899
Loan closing costs, net of accumulated amortization of $4,026 and $3,109 in 2011 and 2010, respectively		1,435		2,703
Prepaid expenses and other assets		2,168		2,296
Intangible Assets:
Goodwill		5,155		5,430
Above market leases, net of accumulated amortization of $8,845 and $8,741 in 2011 and 2010, respectively		4,414		526
In-place leases, net of accumulated amortization of $2,833 and $2,492 in 2011 and 2010, respectively		16,144		322

	$	52,720	$	44,264

Investment in Verde. Investment in Verde relates to a cost method investment in a non-public real estate investment trust. See Note 5 for a discussion of the impairment loss recognized on the investment in Verde during 2011.

Lease Inducements. Lease inducements represent incentives paid to tenants in conjunction with leasing space, such as moving costs, sublease arrangements of prior space and other costs. These amounts are amortized into rental revenues over the individual underlying lease terms.

Predevelopment Costs and Earnest Money. Predevelopment costs represent amounts that are capitalized related to predevelopment projects which the Company determines are probable of future development. In 2011, the Company transferred $6.2 million in predevelopment assets to investment in joint ventures related to the EP I, LLC project (see Note 4). In addition, in 2011, the Company incurred an expense of approximately $937,000 to write off a predevelopment project that was deemed no longer probable of development.

Intangible Assets. Intangible assets, other than goodwill, mainly relate to the acquisition of Promenade in 2011 (see Note 8), with small amounts remaining relating to the 2006 acquisition of the interests in 191 Peachtree Tower. In addition, the Company acquired intangible liabilities with these purchases, including below-market tenant leases and an above-market ground lease, both of which are recorded within Accounts Payable and Accrued Liabilities on the Balance Sheets. Both above-market and below-market tenant leases are amortized into rental revenues over the individual remaining lease terms. The above-market ground lease is amortized into rental property operating expenses over its remaining lease term. In-place leases are amortized into depreciation and amortization expense, also over the individual remaining lease terms. Aggregate net amortization expense related to intangible assets and liabilities was $305,000, $4,000 and $165,000 for the years ended December 31, 2011, 2010 and 2009, respectively. Over the next five years and thereafter, aggregate amortization of these intangible assets and liabilities is anticipated to be as follows (in thousands):

		September 30,			September 30,			September 30,		September 30,		September 30,
	Below Market Rents			Above Market Ground Lease			Above Market Rents		In Place Leases		Total

2012	$	(274	)	$	(9	)	$	674	$	2,633	$	3,024
2013		(249	)		(9	)		674		2,465		2,881
2014		(244	)		(9	)		674		2,324		2,745
2015		(231	)		(9	)		658		2,200		2,618
2016		(200	)		(9	)		390		1,510		1,691
Thereafter		(562	)		(633	)		1,344		5,012		5,161

	$	(1,760	)	$	(678	)	$	4,414	$	16,144	$	18,120


Weighted average remaining lease term		8 years			75 years			8 years		8 years		10 years

Goodwill relates entirely to the office reporting unit. As office assets are sold, either by the Company or by joint ventures in which the Company has an interest, goodwill is allocated to the cost of each sale. The following is a summary of goodwill activity for the years ended December 31, 2011 and 2010 (in thousands):

		September 30,			September 30,
	2011			2010
Beginning Balance	$	5,430		$	5,450
Allocated to property sales		(275	)		(20	)

Ending Balance	$	5,155		$	5,430