Acquisitions and Dispositions

3 Months Ended

Mar. 31, 2017

Acquisitions and dispositions for the periods presented were completed in accordance with our strategy to reposition our investment concentration among the product types and markets in which we operate and to increase our overall investments in quality industrial projects. With the exception of certain properties that have been sold or classified as held for sale, the results of operations for all acquired properties have been included in continuing operations within our consolidated financial statements since their respective dates of acquisition. Transaction costs related to asset acquisitions are capitalized and transaction costs related to business combinations and dispositions are expensed.

Acquisitions

We acquired six properties during the three months ended March 31, 2017. We determined that the six properties acquired during the three months ended March 31, 2017 did not meet the revised definition of a business as the result of early-adopting ASU 2017-01 and, accordingly, we treated them as asset acquisitions as opposed to business combinations.

The following table summarizes amounts recognized for each major class of assets (in thousands) for these acquisitions during the three months ended March 31, 2017:



Real estate assets	$	108,924
Lease related intangible assets	6,497
Fair value of acquired net assets	$	115,421

The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 5.2 years.

Fair Value Measurements

We determine the fair value of the individual components of real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. We have determined that these estimates primarily rely upon level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the "as-if vacant" value for acquisition activity during the three months ended March 31, 2017 are as follows:



	Low	High
Discount rate	5.81%	6.82%
Exit capitalization rate	4.31%	5.32%
Lease-up period (months)	9	12
Net rental rate per square foot - Industrial	$3.50	$5.70

Capitalized acquisition costs were insignificant and the fair value of the six properties acquired during the three months ended March 31, 2017 was substantially the same as the cost of acquisition.

Dispositions

Dispositions of buildings (see Note 10 for the number of buildings sold as well as for their classification between continuing and discontinued operations) and undeveloped land generated net cash proceeds of $103.1 million and $57.4 million during the three months ended March 31, 2017 and 2016, respectively.