Real Estate Properties

The information presented in this Note 4 excludes information related to SIR and its consolidated subsidiaries, unless the context indicates otherwise.

We did not make any acquisitions during the years ended December 31, 2015, or 2014.

During the years ended December 31, 2015, 2014, and 2013, we made improvements, excluding tenant-funded improvements, to our properties totaling $75.7 million, $91.6 million and $122.9 million, respectively. Improvements made during the year ended December 31, 2013, include improvements made by SIR to its properties for the period that SIR was our consolidated subsidiary until July 2, 2013.

We committed $156.4 million for expenditures related to 4,900,000 square feet of leases executed during 2015. Committed but unspent tenant related obligations, including leasing commissions and tenant improvements, based on existing leases as of December 31, 2015, were $118.9 million.

Properties Held For Sale:

We classify all properties that meet the criteria outlined in the Property, Plant and Equipment Topic of the FASB Accounting Standards Codification (Codification) as held for sale on our consolidated balance sheets. During March 2014, the former management team ceased to actively market 31 properties (67 buildings) with a combined 5,641,450 square feet that we had previously classified as held for sale as of December 31, 2013. These properties were not under agreement for sale when our former Trustees were removed in March 2014. These properties were reclassified to properties held and used in operations because they no longer met the requirements under GAAP for classification as held for sale. Operating results for these properties were reclassified from discontinued operations to continuing operations for all periods presented herein. In connection with this reclassification, we reversed previously recorded impairment losses totaling $4.8 million, which included the elimination of estimated costs to sell. As of December 31, 2015, and 2014, we had no properties classified as held for sale.

Property Dispositions:

During the year ended December 31, 2015, we disposed of the following properties (dollars in thousands):



Asset	Date Disposed	Number of Properties	Number of Buildings	Square Footage	Gross Sales Price		Gain (Loss) on Sale
Properties
11350 North Meridian Street	January 2015	1	1	72,264	$	4,200	$	766
333 Laurel Oak Drive(1)	March 2015	—	1	27,164	2,450		251
1921 E. Alton Avenue	March 2015	1	1	67,846	14,533		4,851
46 Inverness Center Parkway	April 2015	—	—	—	2,000		1,857
225 Water Street(2)	May 2015	1	1	318,997	—		—
Sorrento Valley Business Park	June 2015	1	4	105,003	23,500		11,896
Illinois Center	August 2015	1	2	2,090,162	376,000		26,956
16th and Race Street	August 2015	1	1	608,625	43,000		7,922
185 Asylum Street	September 2015	1	1	868,395	113,250		17,619
One South Church Avenue	October 2015	1	1	240,811	32,000		4,282
775 Ridge Lake Boulevard	October 2015	1	1	120,678	16,300		(360		)
One Park Square	October 2015	1	6	259,737	34,300		9,512
Arizona Center	December 2015	1	4	1,070,724	126,000		22,838
4 South 84th Avenue	December 2015	1	1	236,007	18,000		8,393

Portfolio of properties
7450 Campus Drive	May 2015	1	1	77,411
129 Worthington Ridge Road	May 2015	1	1	227,500
599 Research Parkway	May 2015	1	1	48,249
181 Marsh Hill Road	May 2015	1	1	162,036
101 Barnes Road	May 2015	1	1	45,755
15 Sterling Drive	May 2015	1	1	173,015
35 Thorpe Avenue	May 2015	1	1	79,862
50 Barnes Industrial Road North	May 2015	1	1	154,255
5-9 Barnes Industrial Road	May 2015	1	1	38,006
860 North Main Street	May 2015	1	1	31,165
One Barnes Industrial Road South	May 2015	1	1	30,170
Village Lane	May 2015	1	2	58,185
100 Northfield Drive	May 2015	1	1	116,986
905 Meridian Lake Drive	May 2015	1	1	74,652
1717 Deerfield Road	May 2015	1	1	141,186
1955 West Field Court	May 2015	1	1	59,130
5015 S. Water Circle	May 2015	1	1	113,524
Adams Place	May 2015	1	2	230,259
Cabot Business Park	May 2015	1	2	252,755
2300 Crown Colony Drive	May 2015	1	1	45,974
Myles Standish Industrial Park	May 2015	1	2	74,800
340 Thompson Road	May 2015	1	1	25,000
100 South Charles Street	May 2015	1	1	159,616
6710 Oxon Hill	May 2015	1	1	118,336
8800 Queen Avenue South	May 2015	1	1	280,822



Asset	Date Disposed	Number of Properties	Number of Buildings	Square Footage	Gross Sales Price		Gain (Loss) on Sale
9800 Sherlard Parkway	May 2015	1	1	46,765
Rosedale Corporate Plaza	May 2015	1	3	149,116
1000 Shelard Parkway	May 2015	1	1	62,499
525 Park Street	May 2015	1	1	75,636
1900 Meyer Drury Drive	May 2015	1	1	65,225
131-165 West Ninth Street	May 2015	1	1	75,517
7-9 Vreeland Road	May 2015	1	1	155,891
5 Paragon Drive	May 2015	1	1	119,089
1000 Voorhees Drive and 400 Laurel Oak Drive(1)	May 2015	1	2	125,415
1601 Veterans Highway	May 2015	1	1	63,608
Two Corporate Center Drive	May 2015	1	1	291,230
11311 Cornell Park Drive	May 2015	1	1	93,413
5300 Kings Island Drive	May 2015	1	1	159,421
3 Crown Point Court	May 2015	1	1	73,987
515 Pennsylvania Avenue	May 2015	1	1	82,000
443 Gulph Road	May 2015	1	1	21,000
4350 Northern Pike	May 2015	1	1	503,885
Thunderbolt Place	May 2015	1	2	100,505
6160 Kempsville Circle	May 2015	1	1	129,565
448 Viking Drive	May 2015	1	1	75,374
Portfolio of small office and industrial assets		45	53	5,287,790	$	376,000	$	(8,160	)

2501 20th Place South	June 2015	1	1	125,722
420 20th Street North	June 2015	1	1	514,893
Inverness Center	June 2015	1	4	475,882
701 Poydras Street	June 2015	1	1	1,256,971
300 North Greene Street	June 2015	1	1	324,305
1320 Main Street	June 2015	1	1	334,075
AL, LA, NC, SC office portfolio		6	9	3,031,848	$	417,450	$	41,596

12655 Olive Boulevard	June 2015	1	1	98,588
1285 Fern Ridge Parkway	June 2015	1	1	66,510
St. Louis portfolio(3)		2	2	165,098	$	14,300	$	(2,349	)

310-314 Invermay Road(4)	April 2015	1	1	47,480
253-293 George Town Road(4)	April 2015	1	1	143,914
7 Modal Crescent	June 2015	1	1	164,160
71-93 Whiteside Road	June 2015	1	1	303,488
9-13 Titanium Court	June 2015	1	1	69,664
16 Rodborough Road	June 2015	1	1	90,525
22 Rodborough Road	June 2015	1	1	43,427
127-161 Cherry Lane	June 2015	1	1	278,570
310-320 Pitt Street	June 2015	1	1	313,865



Asset	Date Disposed	Number of Properties	Number of Buildings	Square Footage	Gross Sales Price		Gain (Loss) on Sale
44-46 Mandarin Street	June 2015	1	1	226,718
19 Leadership Way	June 2015	1	1	76,714
Australia portfolio(5)		11	11	1,758,525	$	232,955	$	(47,872	)

Widewaters Parkway	August 2015	1	8	514,241
5062 Brittonfield Parkway	August 2015	1	1	40,162
Woodcliff Drive	August 2015	1	6	516,760
Interstate Place	August 2015	1	2	61,399
1000 Pittsford - Victor Road	August 2015	1	1	73,358
1200 Pittsford - Victor Road	August 2015	1	1	18,900
Corporate Crossing	August 2015	1	5	216,126
Canal View Boulevard	August 2015	1	3	118,375
14 Classic Street	August 2015	1	1	37,084
110 W Fayette Street	August 2015	1	1	304,906
251 Salina Meadows Parkway	August 2015	1	1	65,617
Upstate New York portfolio(3)		11	30	1,966,928	$	104,625	$	(12,518	)

9040 Roswell Road	October 2015	1	1	178,941
The Exchange	October 2015	1	2	187,632
3920 Arkwright Road	October 2015	1	1	196,156
1775 West Oak Commons Court	October 2015	1	1	79,854
Georgia portfolio(3)		4	5	642,583	$	48,550	$	(3,059	)
		91	135	18,939,185	$	1,999,413	$	84,421


(1)	This property contains three buildings. We sold one building in March 2015 and two buildings in May 2015.


(2)	Title to this property was transferred to the lender pursuant to a consensual foreclosure in full satisfaction of the mortgage debt with a principal balance of $40.1 million, resulting in a gain on early extinguishment of debt of $17.3 million for the year ended December 31, 2015. See Note 9 for additional information.


(3)	Prior to the disposition of these properties, we recorded a total impairment charge of $17.2 million during the year ended December 31, 2015, based upon updated market information in accordance with our impairment analysis procedures.


(4)	These properties were sold in a separate transaction to a different buyer than other Australian properties.


(5)	The loss on sale includes a $63.2 million cumulative foreign currency translation adjustment reclassified from cumulative other comprehensive loss due to the disposition of the Australian portfolio.

During the years ended December 31, 2014 and 2013, we sold the following properties (dollars in thousands):



Date Sold	Number of Properties	Number of Buildings	Square Footage	Sales Price		Gain (Loss) on Sale
Sales of properties resulting in gains and losses
December 2013	3	40	1,670,104	$	89,000	$	(25,521	)
June 2013(6)	—	—	—	2,551		1,765
June 2013	1	1	30,105	1,600		317
March 2013(6)	—	—	—	1,806		1,596
January 2013(7)	3	18	1,060,026	10,250		1,277
	7	59	2,760,235	$	105,207	$	(20,566	)

Sales of properties with previously recorded asset impairment losses:
June 2014(8)	14	43	2,784,098	$	215,900

December 2013	2	2	77,394	$	2,020
November 2013	18	21	2,125,278	50,500
October 2013	1	2	199,418	4,000
October 2013	1	1	665,545	13,900
October 2013	9	41	1,211,536	43,000
August 2013	1	3	129,452	4,100
June 2013	1	1	143,802	5,250
June 2013	1	2	356,045	16,300
May 2013	1	1	57,250	4,025
April 2013	1	1	618,000	830
	36	75	5,583,720	$	143,925

(6) We sold a land parcel.

(7) We provided mortgage financing to the buyer, an unrelated third party, totaling $7.7 million at 6.0% per annum (Note 8).

(8) In connection with this transaction, we recognized a loss on asset impairment of $2.2 million and a loss on early extinguishment of debt of $3.3 million for the year ended December 31, 2014. The sales price excludes mortgage debt repayments. These properties are included in income from discontinued operations for all years presented.

Results of operations for properties sold prior to December 31, 2014, are included in discontinued operations in our consolidated statements of operations. Summarized income statement information for properties included in discontinued operations is as follows (in thousands):



	Year Ended December 31,
	2014			2013
Rental income	$	14,243		$	55,073
Tenant reimbursements and other income	1,900			6,842
Total revenues	16,143			61,915

Operating expenses	7,138			37,027
Depreciation and amortization	—			12,550
General and administrative	10			4,268
Total expenses	7,148			53,845
Operating income	8,995			8,070
Interest and other income	2			65
Interest expense	(608		)	(1,742		)
Income from discontinued operations	$	8,389		$	6,393

Lease Payments

Our real estate properties are generally leased on gross lease, modified gross lease or triple net lease bases pursuant to non-cancelable, fixed term operating leases expiring between 2016 and 2033. Our triple net leases generally require the lessee to pay all property operating costs. Our gross leases and modified gross leases require us to pay all or some property operating expenses and to provide all or some property management services. A portion of these property operating expenses are reimbursed by the tenants.

The future minimum lease payments, excluding tenant reimbursement revenue, scheduled to be received by us during the current terms of our leases as of December 31, 2015 are as follows (in thousands):



2016	$	400,987
2017	380,501
2018	353,286
2019	313,563
2020	275,406
Thereafter	1,175,661
	$	2,899,404

One of our real estate properties, 111 River Street in Hoboken, New Jersey, is subject to a ground lease. The land on this property is leased pursuant to a non-cancelable, fixed term operating ground lease that expires in 2098.

The future minimum lease payments scheduled to be paid by us during the current terms of this ground lease under which we are the lessee, as of December 31, 2015, are as follows (in thousands):



2016	$	1,477
2017	1,477
2018	1,483
2019	1,503
2020	1,503
Thereafter	128,491
	$	135,934

The amount of ground lease expense included in operating expenses during the years ended December 31, 2015, 2014 and 2013, totaled $1.8 million, $1.8 million and $1.9 million, respectively. Ground lease expense includes percentage rent.