Real Estate Assets, Discontinued Operations and Assets Held for Sale

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Assets Held for Sale

Real Estate Assets, Discontinued Operations and Assets Held-for-Sale

Real Estate Assets

Real estate assets, excluding assets held-for-sale, consisted of the following (in thousands):

	June 30, 2018		December 31, 2017
Buildings and tenant improvements	$	4,712,182	$	4,642,832
Land and improvements	2,073,309		1,950,735
Real estate assets	$	6,785,491	$	6,593,567

Discontinued Operations

The following table illustrates the number of sold or held-for-sale properties included in, or excluded from, discontinued operations in this report:

 

	Held-for-Sale at June 30, 2018	Sold Year-to-Date in 2018	Sold in 2017	Total
Total properties included in discontinued operations	—	—	81	81
Properties excluded from discontinued operations	—	13	17	30
Total properties sold or classified as held-for-sale	—	13	98	111

For the properties that were classified in discontinued operations during 2017, we allocated interest expense to discontinued operations and have included such interest expense in computing income from discontinued operations. Interest expense allocable to discontinued operations was based upon an allocable share of our consolidated unsecured interest expense, as none of the properties included in discontinued operations were encumbered by secured debt. The allocation of unsecured interest expense to discontinued operations was based upon the gross book value of the unencumbered real estate assets included in discontinued operations as it related to the total gross book value of our unencumbered real estate assets. There were no additional properties classified as discontinued operations during the six months ended June 30, 2018 and, as such, no interest expense was allocated to discontinued operations during that period.

The following table illustrates the operational results of the buildings reflected in discontinued operations (in thousands):  

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018			2017
Revenues	$	27	$	35,165		$	32		$	81,404
Operating expenses	4		(11,170		)	(9		)	(26,166		)
Depreciation and amortization	—		(6,315		)	—			(25,849		)
Operating income	31		17,680			23			29,389
Interest expense	—		(6,585		)	—			(14,204		)
Income before gain on sales and income taxes	31		11,095			23			15,185
Gain on sale of depreciable properties	2,889		1,109,091			3,021			1,109,091
Income from discontinued operations before income taxes	2,920		1,120,186			3,044			1,124,276
Income tax expense	—		(11,613		)	—			(11,613		)
Income from discontinued operations	$	2,920	$	1,108,573		$	3,044		$	1,112,663

There were no capital expenditures for properties within discontinued operations during the six months ended June 30, 2018. Capital expenditures on a cash basis for the six months ended June 30, 2017 were $20.6 million for properties within discontinued operations.

Allocation of Noncontrolling Interests - General Partner

The following table illustrates the General Partner's share of the income attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income between continuing and discontinued operations to the noncontrolling interests (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Income from continuing operations attributable to common shareholders	$	190,952	$	118,194	$	263,792	$	184,362
Income from discontinued operations attributable to common shareholders	2,893		1,092,349		3,016		1,096,381
Net income attributable to common shareholders	$	193,845	$	1,210,543	$	266,808	$	1,280,743

Allocation of Noncontrolling Interests - Partnership

Substantially all of the income from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders.

Assets Held-for-Sale

At June 30, 2018, no in-service properties or undeveloped land were classified as held-for-sale. The following table illustrates aggregate balance sheet information for all properties and land held-for-sale (in thousands):

	Held-for-Sale Properties Included in Continuing Operations
	June 30, 2018		December 31, 2017
Land and improvements	$	—	$	8,157
Buildings and tenant improvements	—		10,505
Undeveloped land	—		—
Accumulated depreciation	—		(2,553		)
Deferred leasing and other costs, net	—		862
Other assets	—		579
Total assets held-for-sale	$	—	$	17,550
Total liabilities related to assets held-for-sale	$	—	$	1,163