Real Estate Properties

3 Months Ended

Mar. 31, 2012

Real Estate Properties

Real Estate Properties

Note 3.  Real Estate Properties

During the three months ended March 31, 2012, we, excluding SIR, acquired two properties with a combined 1,878,335 square feet for an aggregate purchase price of $252,100, including the assumption of $147,872 of mortgage debt and excluding closing costs.  We also funded $23,681 of improvements to our owned properties.  As of May 3, 2012, we have also entered into a previously disclosed agreement to acquire a property with 172,200 square feet for a purchase price of $49,000, including the assumption of approximately $29,200 of mortgage debt and excluding closing costs.  Details of our completed and pending acquisitions during 2012 are as follows:

Completed Acquisitions:

											Acquired
									Acquired		Real Estate				Premium
		Square	Purchase				Buildings and		Real Estate		Lease		Assumed		on Assumed
Date	Location	Feet	Price(1)		Land		Improvements		Leases		Obligations		Debt		Debt
January 2012	Chicago, IL	1,009,940	$	150,600	$	30,400	$	115,817	$	22,189	$	5,348	$	147,872	$	12,458
March 2012	Hartford, CT	868,395	101,500		15,930		60,312		25,542		284		—		—
		1,878,335	$	252,100	$	46,330	$	176,129	$	47,731	$	5,632	$	147,872	$	12,458

(1) Purchase price includes the assumption of mortgage debt and excludes closing costs.

During the three months ended March 31, 2012, we completed the purchase price allocation on four properties located in Phoenix, AZ with a combined 1,063,364 square feet.  We acquired these properties in March 2011 for an aggregate purchase price of $136,500, excluding closing costs.  Based upon our evaluation of an appraisal prepared by an independent real estate appraisal firm completed in March 2012, we estimated the fair value of the acquired land and buildings and improvements to be $22,614 and $64,104, respectively.  As a result, we retrospectively adjusted the preliminary purchase price allocation by reallocating $8,371 from land to buildings and improvements.  All other allocation amounts were unchanged.

Pending Acquisitions:

In January 2012, we entered an agreement to acquire an office property located in Austin, TX with 172,200 square feet.  The purchase price is $49,000, including the assumption of approximately $29,200 of mortgage debt and excluding closing costs.  We currently expect to acquire this property during the second quarter of 2012; however, this acquisition is subject to customary closing conditions, including the assumption of existing mortgage debt, and we can provide no assurance that we will acquire this property in that time period or at all.

In addition, in April 2012, SIR entered agreements to acquire two properties for an aggregate purchase price of $104,400, excluding closing costs.  We understand that SIR currently expects that it will acquire these properties during the remainder of 2012; however, these acquisitions are subject to SIR’s satisfactory completion of diligence and other customary closing conditions.  Accordingly, we can provide no assurance that SIR will acquire all or any of these properties in that time period or at all.

As of March 31, 2012 and December 31, 2011, none of our properties were classified as held for sale.  We classify all properties probable for sale within one year as held for sale in our condensed consolidated balance sheets.  Results of operations for properties sold or held for sale are included in discontinued operations in our condensed consolidated statements of income.  Summarized income statement information for properties sold in 2011 is as follows:

Income Statement:

	Three Months
	Ended
	March 31, 2011
Rental income	$	7,239
Operating expenses	(3,438		)
Depreciation and amortization	(1,552		)
General and administrative	(254		)
Acquisition related costs	(86		)
Operating income	1,909
Interest income	2
Income from discontinued operations	$	1,911