REAL ESTATE ACTIVITIES

Investments in real estate as of June 30, 2014 and December 31, 2013 were comprised of the following:



(in thousands of dollars)	As of June 30, 2014			As of December 31, 2013
Buildings, improvements and construction in progress	$	3,056,170		$	3,049,758
Land, including land held for development	475,041			478,110
Total investments in real estate	3,531,211			3,527,868
Accumulated depreciation	(1,063,080		)	(1,012,746		)
Net investments in real estate	$	2,468,131		$	2,515,122

Capitalization of Costs

The following table summarizes our capitalized salaries, commissions and benefits and interest for the three and six months ended June 30, 2014 and 2013:



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands of dollars)	2014		2013		2014		2013
Development/Redevelopment Activities:
Salaries and benefits	$	431	$	136	$	825	$	313
Interest	191		213		294		289
Leasing Activities:
Salaries, commissions and benefits	1,409		1,185		2,829		2,722

Dispositions

In July 2014, we entered into a 50/50 joint venture with The Macerich Company to redevelop the Gallery at Market East in Philadelphia, Pennsylvania. In connection therewith, we contributed and sold real estate assets to the venture and Macerich acquired its interest in the venture and real estate from us for $106.8 million in cash. It is expected that both parties will make additional investments in the project. We used $25.8 million of such proceeds to repay a mortgage loan secured by 801 Market Street, a property that is part of the Gallery complex, $50.0 million to repay the outstanding balance on our 2013 Revolving Facility, and the remaining proceeds for general corporate purposes.

In June 2014, we sold South Mall in Allentown, Pennsylvania for $23.6 million, representing a capitalization rate of 10.1%. We recorded a gain of $0.1 million from the sale of this property.

Impairment of Assets

Nittany Mall

In June 2014, we recorded a loss on impairment of assets at Nittany Mall in State College, Pennsylvania of $13.9 million. During the second quarter of 2014, we entered into negotiations with a prospective buyer of the property, which are ongoing and could result in changes to our underlying assumptions. As a result of these negotiations, we determined that the holding period for the property was less than had been previously estimated, which we concluded to be a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the purchase and sale agreement with the prospective buyer of the property, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Nittany Mall were less than the carrying value of the property, and recorded the impairment loss.

North Hanover Mall

In June 2014, we recorded a loss on impairment of assets at North Hanover Mall in Hanover, Pennsylvania of $2.2 million. During the second quarter of 2014, we entered into negotiations with a prospective buyer of the property, which are ongoing and could result in changes to our underlying assumptions. As a result of these negotiations, we determined that the holding period for the property was less than had been previously estimated, which we concluded to be a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the purchase and sale agreement with the prospective buyer of the property, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for North Hanover were less than the carrying value of the property, and recorded the impairment loss. We previously recognized impairment losses on North Hanover of $6.3 million in 2013 and $24.1 million in 2011.

South Mall

In March 2014, we recorded a loss on impairment of assets at South Mall in Allentown, Pennsylvania of $1.3 million. We sold the property in June 2014.

Discontinued Operations

We have presented as discontinued operations the operating results of Phillipsburg Mall, Orlando Fashion Square, Chambersburg Mall, Paxton Towne Centre, Christiana Center and Commons at Magnolia, which are properties that were sold in 2013. The following table summarizes revenue and expense information for the three and six months ended June 30, 2013 for these discontinued operations (there were no operating results for these properties from, and there were no properties classified in, discontinued operations in the three or six months ended June 30, 2014):



	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands of dollars)		2013				2013
Real estate revenue		$	2,745			$	6,888
Expenses:
Operating expenses		(795		)		(2,881		)
Depreciation and amortization		(363		)		(727		)
Interest expense		(587		)		(1,259		)
Total expenses		(1,745		)		(4,867		)
Operating results from discontinued operations		1,000				2,021
Gains on sales of discontinued operations		—				33,254
Income from discontinued operations		$	1,000			$	35,275