3. REAL ESTATE INVESTMENTS

As of March 31, 2018 and December 31, 2017, the gross carrying value of the properties was as follows (in thousands):

	March 31,		December 31,
	2018		2017
Land	$	498,197	$	492,197
Building and improvements		2,915,399		2,896,113
Tenant improvements		451,110		444,038
Total	$	3,864,706	$	3,832,348

Acquisitions

On March 22, 2018, the Company acquired, through a 99-year ground lease, the leasehold interest in a one-acre land parcel, located at 3001-3003 JFK Boulevard, in Philadelphia, Pennsylvania. The Company prepaid $24.6 million of ground lease rent and capitalized $0.3 million of costs related to entering the lease in accordance with ASC 840. Based on the Company’s evaluation under ASC 840, the ground lease was classified as an operating lease and included in the “Other assets” caption in the consolidated balance sheets.

On January 5, 2018, the Company acquired, from its real estate venture partner in both the Four Tower Bridge real estate venture and the Seven Tower Bridge real estate venture, the remaining 35% ownership interest in the Four Tower Bridge real estate venture through a nonmonetary exchange for the Company's 20% ownership interest in the Seven Tower Bridge real estate venture. The Four Tower Bridge real estate venture owned an office property containing 86,021 square feet, in Conshohocken, Pennsylvania, encumbered with $9.7 million in debt. The Company previously accounted for its noncontrolling interest in Four Tower Bridge using the equity method. As a result of the exchange transaction, the Company obtained control of the Four Tower Bridge property.

The acquisition of the remaining 35% ownership interest of Four Tower Bridge resulted in the consolidation of the property, which has been accounted for as an asset acquisition under ASU 2017-01. As such, the Company capitalized $0.1 million of acquisition related costs and allocated the unencumbered acquisition value, consisting of the fair value of $23.6 million and the acquisition related costs, to tangible and intangible assets and liabilities. The unencumbered acquisition value was determined under the comparative sales approach, which utilized observable transactions within the Conshohocken submarket.

The Company utilized a number of sources in making estimates of fair value for purposes of allocating the acquisition value to tangible and intangible assets acquired. The acquisition value has been allocated as follows (in thousands):

	January 5, 2018
Building, land and improvements	$	20,734
Intangible assets acquired (a)		3,144
Below market lease liabilities assumed (b)		(182	)
Total unencumbered acquisition value	$	23,696
Mortgage debt assumed - at fair value (c)		(9,940	)
Total encumbered acquisition value	$	13,756

Total unencumbered acquisition value		23,696
Mortgage debt assumed - at fair value (c)		(9,940	)
Investment in unconsolidated real estate ventures		(3,502	)
Net working capital assumed		1,379
Gain on real estate venture transactions	$	11,633

(a)Weighted average amortization period of 4.1 years.

(b)Weighted average amortization period of 4.8 years.

(c)The outstanding principal balance on mortgage debt assumed at January 5, 2018 was $9.7 million.

Four Tower Bridge contributed approximately $0.7 million of revenue and $0.1 million of net income, included in the Company’s consolidated income statements, for the period from January 5, 2018 through March 31, 2018.

Dispositions

The Company sold the following land parcels during the three-month period ended March 31, 2018 (dollars in thousands):

Disposition Date	Property/Portfolio Name	Location	Number of Parcels		Acres		Sales Price		Net Proceeds on Sale		Gain on Sale
March 16, 2018	Garza Ranch - Office	Austin, TX		1		6.6	$	14,571	$	14,509	$	-	(a)
January 10, 2018	Westpark Land	Durham, NC		1		13.1		485		412		22
Total Dispositions				2		19.7	$	15,056	$	14,921	$	22

(a)

The Company has a continuing involvement, through a completion guarantee, which requires the Company as developer to complete certain infrastructure improvements on behalf of the buyers of the land parcels. The Company does not transfer control of the land parcel until the infrastructure improvements are complete and the guarantee is released. Accordingly, the cash received at settlement was recorded as “Deferred income, gains and rent” on the Company’s consolidated balance sheets and the Company will recognize the sale once the infrastructure improvements are complete. See Note 14, “Commitments and Contingencies,” for further discussion of the infrastructure improvements.

The sale of land referenced above does not represent a strategic shift that has a major effect on the Company’s operations and financial results. Accordingly, the operating results of these properties remain classified within continuing operations for all periods presented.