Note 5 – Property and Equipment

Operating Property, net

As of June 30, 2019 and December 31, 2018, property associated with our operating activities is summarized as follows:



	June 30,		December 31,
(Dollars in thousands)	2019		2018
Land	$	75,518	$	75,689
Building and improvements		149,211		149,734
Leasehold improvements		56,667		55,299
Fixtures and equipment		172,443		167,943
Construction-in-progress		6,885		3,478
Total cost		460,724		452,143
Less: accumulated depreciation		(204,963)		(194,476)
Operating property, net	$	255,761	$	257,667

Depreciation expense for operating property was $5.4 million and $10.8 million for the quarter and six months ended June 30, 2019 and $5.4 million and $10.2 million for the quarter and six months ended June 30, 2018, respectively.

Investment and Development Property, net

As of June 30, 2019 and December 31, 2018, our investment and development property is summarized below:



	June 30,		December 31,
(Dollars in thousands)	2019		2018
Land	$	24,363	$	24,371
Building		1,900		1,900
Construction-in-progress (including capitalized interest)		75,503		60,533
Investment and development property	$	101,766	$	86,804

Construction-in-Progress – Operating and Investing Properties

Construction-in-Progress balances are included in both our operating and development properties. The balances of our major projects along with the movements for the six months ended June 30, 2019 are shown below:



(Dollars in thousands)	Balance, December 31, 2018		Additions during the period(1)		Completed during the period		Foreign currency translation		Balance, June 30, 2019
Union Square development	$	55,634	$	14,282	$	—	$	—	$	69,916
Courtenay Central development		5,571		398		—		—		5,969
Cinema developments and improvements		1,664		8,842		(6,129)		7		4,384
Other real estate projects		1,142		1,104		(95)		(32)		2,119
Total	$	64,011	$	24,626	$	(6,224)	$	(25)	$	82,388

(1)

Includes capitalized interest of $1.5 million and $2.7 million for the quarter and six months ended June 30, 2019.

Real Estate Transactions

Purchase of Income Producing Property at Auburn/Redyard, Australia – On June 29, 2018, we added 20,870 square feet of land, improved with a 16,830 square foot office building, to our Auburn/Redyard entertainment-themed center (“ETC”). The property was acquired at auction for $3.5 million (AU$4.5 million) and is bordered by our existing ETC on three sides. The property is leased to Telstra through July 2022. This lease will allow us time to plan for the efficient integration of the property into our ETC. With this acquisition, Auburn/Redyard now represents approximately 519,992 square feet (48,309 square meters) of land, with approximately 1,620 feet (498 meters) of uninterrupted frontage to Parramatta Road, a major Sydney arterial motorway.

Purchase of Land at Cannon Park in Townsville, Australia – On June 13, 2018, we acquired a 163,000 square foot (15,150 square meter) parcel of land at our Cannon Park ETC, in connection with the restructuring of our relationship with the adjacent land owner. Prior to the restructuring, this parcel was commonly owned by us and the adjoining land owner. In the restructuring, the adjoining land owner conveyed to us its interest in the parcel for AU$1. We granted the adjoining land owner certain access rights with respect to that parcel.