Property and Equipment, Net

9 Months Ended

Mar. 31, 2023

Property, Plant And Equipment [Abstract]

Property and Equipment, Net

10. Property and Equipment, Net

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

	March 31,		June 30,		March 31,
	2023		2022		2022
Land	$	38,345	$	44,478	$	44,478
Building		303,034		342,236		341,026
Equipment		220,731		268,352		266,384
Construction in progress		20,980		11,188		8,137
Property and equipment, gross		583,090		666,254		660,025
Accumulated depreciation		(330,293)		(376,328)		(365,487)
Property and equipment, net	$	252,797	$	289,926	$	294,538

On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep for $52.0 million. Adtalem received $5.2 million of cash at the time of closing and held a mortgage, secured by the property, from DePaul College Prep for $46.8 million. The mortgage was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per

annum, payable monthly. The buyer had an option to make prepayments. Due to Adtalem’s involvement with financing the sale, the transaction did not qualify as a sale for accounting purposes. Adtalem continued to maintain the assets associated with the sale on the Consolidated Balance Sheets. We recorded a note receivable of $40.3 million and a financing payable of $45.5 million at the time of the sale, which were classified as other assets, net and other liabilities, respectively, on the Consolidated Balance Sheets. See Note 9 “Accounts Receivable and Credit Losses” for a discussion on the discounting of the note receivable. On February 23, 2023, DePaul College Prep paid the mortgage in full. The $46.8 million received during the third quarter of fiscal year 2023 is classified as an investing activity in the Consolidated Statements of Cash Flows. Upon receiving full repayment of the mortgage, Adtalem no longer is involved in the financing of the sale and therefore derecognized the note receivable, the financing payable, and the assets associated with the campus facility, which resulted in recognizing a gain on sale of assets of $13.3 million in the three and nine months ended March 31, 2023. This gain was recorded at Adtalem’s home office, which is classified as “Home Office and Other” in Note 20 “Segment Information.”