Real Estate Investments (Tables)

3 Months Ended

Mar. 31, 2017

Real Estate Properties [Line Items]

Gross Carrying Value Of Company's Properties

As of March 31, 2017 and December 31, 2016, the gross carrying value of the Properties was as follows (in thousands):

	March 31,		December 31,
	2017		2016
Land	$	462,014	$	469,522
Building and improvements		2,801,495		2,683,087
Tenant improvements		438,695		433,686
Operating properties		3,702,204		3,586,295
Assets held for sale - real estate investments (a)		5,576		73,591
Total	$	3,707,780	$	3,659,886

(a) Real estate investments related to assets held for sale above represents gross real estate assets and does not include accumulated depreciation or other assets on the balance sheet of the property held for sale. See “Held for Sale” below in this Note 3.

Dispositions

The Company sold the following eight office properties and one mixed-use property during the three-month period ended March 31, 2017 (dollars in thousands):

Disposition Date	Property/Portfolio Name	Location	Number of Properties	Rentable Square Feet		Sales Price		Net Proceeds on Sale		Gain/(Loss) on Sale (a)
March 30, 2017	200, 210 & 220 Lake Drive East (Woodland Falls)	Cherry Hill, NJ	3		215,465	$	19,000	$	17,771	$	(249	)	(b)
March 15, 2017	Philadelphia Marine Center (Marine Piers)	Philadelphia, PA	1		181,900		21,400		11,182		6,498		(c)
March 13, 2017	11700, 11710, 11720 & 11740 Beltsville Drive (Calverton)	Beltsville, MD	3		313,810		9,000		8,354		-		(d)
February 2, 2017	1200 & 1220 Concord Avenue (Concord Airport Plaza)	Concord, CA	2		350,256		33,100		32,010		551		(e)
Total Dispositions			9		1,061,431	$	82,500	$	69,317	$	6,800

(a) Gain/(Loss) on Sale is net of closing and other transaction related costs.

(b) During the fourth quarter of 2016, the Company recognized a $7.3 million impairment related to these properties.

(c) On March 15, 2017, the Company sold its sublease interest in the Piers at Penn’s Landing (the “Marine Piers”), which includes leasehold improvements containing 181,900 net rentable square feet, and a marina, located in Philadelphia, Pennsylvania for a sales price of $21.4 million, which will be paid in two installments. On the closing date, the buyer paid $12.0 million in cash. On the second purchase price installment date, the buyer will pay $9.4 million. The second purchase price installment is due on (a) January 31, 2020, in the event that the tenant at the Marine Piers does not exercise its existing option to extend the term of the sublease or (b) January 15, 2024, in the event that the tenant does exercise its current extension option to extend the term of the sublease. In accordance with ASC 360-20, Real Estate Sales, the Company determined that it is appropriate to account for the sales transaction under the cost recovery method. The Company received cash proceeds of $11.2 million, after closing costs and prorations, and the net book value of the Marine Piers was $4.7 million, resulting in a gain on sale of $6.5 million. The remaining gain on sale of $9.4 million will be recognized on the second purchase price installment date. The Marine Piers was classified as mixed-use within our property count.

(d) During the fourth quarter of 2016, the Company recognized a $3.0 million impairment related to these properties. During the first quarter of 2017, there was a price reduction of $1.7 million under the agreement of sale and an additional impairment of $1.7 million was recognized.

(e) This sale is designated as a like-kind exchange under Section 1031 of the Internal Revenue Code (“IRC”) and, as such, the proceeds, totaling $32.0 million after closing costs and prorations, were deposited with a Qualified Intermediary, as defined under the IRC. The proceeds received at closing were recorded as “Other assets” in the Company’s consolidated balance sheet as of March 31, 2017. During the fourth quarter of 2016, the Company recognized a $11.5 million impairment related to these properties.

The Company sold the following land parcels during the three-month period ended March 31, 2017 (dollars in thousands):

Disposition Date	Property/Portfolio Name	Location	Number of Parcels		Acres		Sales Price		Net Proceeds on Sale		Gain on Sale
February 15, 2017	Gateway Land C	Richmond, VA		1		4.8	$	1,100	$	1,043	$	-	(a)
January 30, 2017	Garza Ranch	Austin, TX		1		1.7		3,500		3,277		-	(b)
Total Dispositions				2		6.5	$	4,600	$	4,320	$	-

(a) During the fourth quarter of 2016, the Company recognized a nominal impairment related to this land parcel.

(b) The Company has a continuing involvement through a completion guaranty, which requires the Company as developer to complete certain infrastructure improvements on behalf of the buyers of the land parcels. The cash received at settlement was recorded as “Deferred income, gains and rent” on the Company’s consolidated balance sheet and the Company will recognize the sale once the infrastructure improvements are complete. See Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations” for further discussion of the infrastructure improvements.

Held for Sale Properties Included in Continuing Operations [Member]

Real Estate Properties [Line Items]

Summary of Properties Classified as Held for Sale but Which did not Meet the Criteria to be Classified within Discontinued Operations

The following is a summary of one property classified as held for sale but which did not meet the criteria to be classified within discontinued operations at March 31, 2017 (in thousands):

	Held for Sale Property Included in Continuing Operations
	March 31, 2017
	Other Segment - Retail
ASSETS HELD FOR SALE
Real estate investments:
Operating properties	$	5,576
Accumulated depreciation		(79	)
Operating real estate investments, net		5,497
Land held for development		-
Total real estate investments, net		5,497
Other assets		765
Total assets held for sale, net	$	6,262
LIABILITIES HELD FOR SALE
Other liabilities	$	387
Total liabilities held for sale	$	387