Investment in Real Estate

12 Months Ended

Dec. 31, 2017

Real estate by property type and segment includes the following:



	December 31, 2017		December 31, 2016
Development property:
Residential real estate	$	100,279	$	101,292
Resorts and leisure	4,131		263
Commercial leasing and sales	53,896		58,364
Forestry	2,488		2,492
Corporate	2,571		2,438
Total development property	163,365		164,849

Operating property:
Residential real estate	7,344		8,097
Resorts and leisure	103,616		107,029
Commercial leasing and sales	110,491		82,336
Forestry	19,510		19,608
Other	50		50
Total operating property	241,011		217,120
Less: Accumulated depreciation	71,752		67,349
Total operating property, net	169,259		149,771
Investment in real estate, net	$	332,624	$	314,620

Development property consists of land the Company is developing or intends to develop for sale or future operations and includes direct costs associated with the land, development and construction costs and indirect costs. Residential real estate includes residential communities. Resorts and leisure development property consists of the improvement and expansion of existing beach club property, land and development costs and improvements to existing restaurant property. Commercial leasing and sales development property primarily consists of land and development costs for commercial and industrial uses, including the Pier Park Crossings JV, land holdings near the Northwest Florida Beaches International Airport and Port of Port St. Joe. Development property in the commercial leasing and sales and resorts and leisure segments will be reclassified as operating property as it is placed into service.

Operating property includes the following components:



	December 31, 2017		December 31, 2016
Land and land improvements	$	77,788	$	73,239
Buildings and building improvements	152,272		133,678
Timber	10,951		10,203
	241,011		217,120
Less: Accumulated depreciation	71,752		67,349
Total operating property, net	$	169,259	$	149,771

Operating property includes property that the Company uses for operations and activities. Residential real estate operating property consists primarily of residential utility assets. The resorts and leisure operating property includes the WaterColor Inn, certain vacation rental properties, golf courses, a beach club and marinas. Commercial leasing and sales operating property includes property developed or purchased by the Company and used for retail and commercial rental purposes, including property in the Pier Park North JV, Venture Crossings, and Beckrich Office Park as well as other properties. Forestry operating property includes the Company’s timberlands. Operating property may be sold in the future as part of the Company’s principal real estate business.

Depreciation expense related to real estate investments was $6.2 million, $6.0 million and $6.2 million in 2017, 2016 and 2015, respectively. Depletion and amortization expense related to our timber operations was $0.5 million in each of 2017, 2016 and 2015.