. Property

, Equipment,

Assets Held for Sale,

Operating Leases

, and Sale-Leaseback Transactions

Property and equipment, net, is comprised of the following (in thousands):

	201 6		201 5
Land	$	209,930	$	212,073
Buildings		398,984		426,813
Improvements		303,032		358,549
Restaurant equipment		222,646		247,775
Other equipment		82,204		87,782
Surplus properties*		4,354		10,504
Construction in progress and other		3,325		4,316
		1,224,475		1,347,812
Less accumulated depreciation		553,225		595,638
Property and equipment, net	$	671,250	$	752,174

* Surplus properties represent assets held for sale that are not classified

as such in the Consolidated Balance Sheets as we do not expect to sell these assets within the next 12 months. These assets primarily consist of parcels of land upon which we have no intention to build restaurants, closed properties which include a building, and liquor licenses not needed for operations.

ncluded within the current assets section of our Consolidated Balance Sheets at May 31, 2016 and June 2, 2015 are amounts classified as assets held for sale totaling $4.6 million and $5.5 million, respectively. Assets held for sale primarily consist of parcels of land upon which we have no intention to build restaurants, land and buildings of closed restaurants, and various liquor licenses. In addition to operating restaurants sold and leased back as discussed below and Lime Fresh restaurants sold as discussed in Note 3 to the Consolidated Financial Statements, during fiscal years

2016, 2015, and 2014 we sold surplus properties with carrying values of $6.7 million, $9.5 million, and $14.0 million, respectively, at net gains of $0.9 million, $1.7 million, and $1.5 million, respectively. Cash proceeds, net of broker fees, from these sales totaled $7.6 million, $11.2 million, and $15.4 million, respectively.

During the

fiscal year ended June 3, 2014, we completed sale-leaseback transactions of the land and building for three Company-owned Ruby Tuesday concept restaurants for gross cash proceeds of $5.9 million, exclusive of transaction costs of approximately $0.3 million. Equipment was not included. The carrying value of the properties sold was $4.8 million. The leases have been classified as operating leases and have initial terms of 15 years, with renewal options of up to 20 years. Net proceeds from the sale-leaseback transactions to date were used for general corporate purposes, including capital expenditures, debt payments, and the repurchase of shares of our common stock.

We realized gain

s during fiscal year 2014 on the sale-leaseback transactions of $0.8 million, which have been deferred and are being recognized on a straight-line basis over the initial terms of the leases. The current portion of the deferred gains on all sale-leaseback transactions to date was $1.1 million as of both May 31, 2016 and June 2, 2015, and is included in Accrued liabilities – Rent and other in our Consolidated Balance Sheets. The long-term portion of the deferred gains on all sale-leaseback transactions to date was $10.9 million and $11.9 million as of May 31, 2016 and June 2, 2015, respectively, and is included in Other deferred liabilities in our Consolidated Balance Sheets. Amortization of the deferred gains of $1.1 million in each of fiscal year May 31, 2016, June 2, 2015, and June 3, 2014 is included within Other restaurant operating costs in our Consolidated Statements of Operations and Comprehensive Loss.

The following is a schedule by year of future minimum lease payments under operating leases that have initial lease terms in excess of one year as of

May 31, 2016 (in thousands):

201 7	$	45,507
201 8		43,492
201 9		40,757
20 20		37,533
20 21		35,259
Subsequent years		410,636
Total minimum lease payments	$	613,184

The amounts included in the table above

include lease payments for certain optional renewal periods for which exercise is considered reasonably assured as well as operating leases totaling $4.3 million as discussed below for which sublease income from franchisees or others is contractually required.

The following schedule shows the future minimum sub-lease payments contractually due from franchisees and others for the next five years and thereafter under noncancelable sub-lease agreements (in thousands):

	Franchisee s		Others		Total
201 7	$	247	$	568	$	815
2018		247		490		737
2019		208		393		601
2020		27		396		423
2021		–		411		411
Subsequent years		–		1,324		1,324
Total minimum sub-lease payments	$	729	$	3,582	$	4,311

The amounts due from franchisees in the table above are contractually due from one of our domestic franchisees, which defaulted on certain lease payments related to these subleases

during the current fiscal year. As further discussed in Notes 7 and 16 to the Consolidated Financial Statements, this franchisee closed all ten of its restaurants on July 26, 2016 and ceased operations. We recorded a liability of $0.9 million as of May 31, 2016, which represented our obligation for both the future rent and other lease-related charges through the end of the term of these leases.

The following

table summarizes our minimum and contingent rent expense and our sublease rental income under our operating leases (in thousands):

	20 1 6			20 15			20 14
Included within continuing operations
Minimum rent	$	49,699		$	50,489		$	52,774
Contingent rent		662			745			430
		50,361			51,234			53,204
Sublease rental income		(940	)		(504	)		(409	)
	$	49,421		$	50,730		$	52,795

The amounts shown for fiscal

years 2016, 2015, and 2014 above exclude rent expense of $3.6 million, $1.2 million, and $5.7 million, respectively, relating to lease reserves established for closed restaurants or dead sites, which is included within Closures and impairments expense in our Consolidated Statements of Operations and Comprehensive Loss.