Real Estate Activities

6 Months Ended

Jun. 30, 2022

2. REAL ESTATE ACTIVITIES

Investments in real estate as of June 30, 2022 and December 31, 2021 were comprised of the following:


(in thousands of dollars)	June 30, 2022			December 31, 2021
Buildings, improvements and construction in progress	$	2,741,664		$	2,762,675
Land, including land held for development		421,983			443,686
Total investments in real estate		3,163,647			3,206,361
Accumulated depreciation		(1,443,004	)		(1,405,260	)
Net investments in real estate	$	1,720,643		$	1,801,101

Capitalization of Costs

The following table summarizes our capitalized interest, compensation, including commissions, and real estate taxes for the three and six months ended June 30, 2022 and 2021:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands of dollars)	2022		2021		2022		2021
Development/Redevelopment Activities:
Interest (1)	$	21	$	17	$	45	$	147
Compensation		—		25		45		62
Real estate taxes		—		29		—		58
Leasing Activities:
Compensation, including commissions (2)		72		27		101		27

(1) Includes interest capitalized on investments in partnerships under development.

(2) The definition of initial direct costs under ASC 842 includes only those incremental costs of a lease that would not have been incurred if the lease had not been obtained. Commissions paid for successful leasing transactions continue to be capitalized.

Impairment of Assets

Exton Square Mall

In conjunction with the preparation of our 2021 annual financial statements, we identified a triggering event at Exton Square Mall in Exton, Pennsylvania as a result of our determination to decrease the holding period of the property. This led us to conduct an analysis of possible impairment at the property and, during the year ended December 31, 2021, we recorded a loss on impairment of assets of approximately $8.4 million. In March 2022, we executed a purchase and sale agreement for Exton Square Mall, which was subsequently amended in July 2022, for a total sale price of $28.8 million. As a result, Exton Square Mall met the criteria to be classified as held for sale as of June 30, 2022.

Disposition

Valley View Mall Derecognition

In August 2020, a court order assigned a receiver to operate Valley View Mall in La Crosse, Wisconsin on behalf of the lender of the mortgage loan secured by the property. In May 2022, we conveyed the property as a result of a foreclosure sale. As such, as of June 30, 2022, the $27.2 million mortgage liability and corresponding contract asset in relation to the Valley View Mall property were written off.

Other Property Disposition

In February 2022, we completed the redemption of preferred equity issued as part of a previous sale of our New Garden land parcel. In connection with this settlement, we received approximately $2.5 million, which funds were used to pay down our First Lien Revolving Facility and First Lien Term Loan. In connection with this transaction, we recorded a gain on sale of preferred equity of $3.7 million in the six months ended June 30, 2022.

In June 2022, we sold a parcel of land adjacent to the Moorestown Mall in Moorestown, New Jersey for $11.8 million. We used net proceeds of $11.7 million from the sale to pay down our First Lien Revolving Facility and First Lien Term Loan. We recorded a gain of $8.8 million in connection with the sale.

In June 2022, we sold an outparcel at the Francis Scott Key Mall in Frederick, Maryland for $2.4 million. We recorded a gain of $1.7 million in connection with the sale. We used net proceeds of $2.4 million from the sale to pay down its property mortgage.

In August 2022, we sold two outparcels at The Mall at Prince George's in Hyattsville, Maryland for $2.4 million and Magnolia Mall in Florence, South Carolina for $0.9 million. We used net proceeds of approximately $3.2 million to pay down our First Lien Term Loan in August 2022.