Real Estate Properties

9 Months Ended

Sep. 30, 2012

Real Estate Properties

Real Estate Properties

Note 3.  Real Estate Properties

Completed Acquisitions:

Since January 1, 2012, we have acquired 15 properties with a combined 5,975,699 square feet for an aggregate purchase price of $817,257, including the assumption of $359,212 of mortgage debt and excluding closing costs.  Details of acquisitions we completed during 2012 are as follows:

											Acquired
									Acquired		Real Estate				Premium
		Square	Purchase				Buildings and		Real Estate		Lease		Assumed		on Assumed
Date	Location	Feet	Price(1)		Land(2)		Improvements(2)		Leases(2)		Obligations(2)		Debt		Debt
CWH (excluding SIR) Acquisitions through September 30, 2012:
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		—		—
May 2012	Austin, TX	170,052	49,000		7,900		38,533		4,733		30		29,012		2,136
September 2012	Columbia, SC	334,075	60,000		1,661		53,058		11,375		3,932		40,328		2,162
		2,382,462	361,100		55,891		267,720		63,839		9,594		217,212		16,756
SIR Acquisitions through September 30, 2012:
June 2012	Provo, UT	405,699	85,500		6,700		78,800		—		—		—		—
June 2012	Englewood, CO	140,162	18,900		3,230		11,801		3,869		—		—		—
July 2012	Windsor, CT	268,328	27,175		4,250		16,695		6,230		—		—		—
July 2012	Topeka, KS	143,934	19,400		1,300		15,918		2,182		—		—		—
August 2012	Huntsville, AL	1,370,974	72,782		4,030		68,752		—		—		—		—
September 2012	Carlsbad, CA	95,000	24,700		3,450		19,800		2,934		—		18,500		1,484
September 2012	Chelmsford, MA	110,882	12,200		2,040		8,532		2,292		217		7,500		447
		2,534,979	260,657		25,000		220,298		17,507		217		26,000		1,931
		4,917,441	$	621,757	$	80,891	$	488,018	$	81,346	$	9,811	$	243,212	$	18,687

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

(2)The allocation of purchase price is based on preliminary estimates and may change upon completion, among other reasons, of (i) third party appraisals and (ii) our analysis of acquired in place leases and building valuations.

In October 2012, we acquired two office properties located in Indianapolis, IN with a combined 1,058,258 square feet.  The aggregate purchase price was $195,500, including the assumption of $116,000 of mortgage debt and excluding closing costs.

We also funded $80,168 of improvements to our properties during the nine months ended September 30, 2012.

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.

Our and SIR’s Pending Acquisitions:

As of November 6, 2012, SIR has agreed to acquire five properties with a combined 506,592 square feet for an aggregate purchase price of $132,400, excluding closing costs.  We understand that these pending 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.

Property Sales:

In April 2012, we sold an office property located in Salina, NY with 12,934 square feet for $575, excluding closing costs.  In connection with this sale, we provided mortgage financing to the buyer, an unrelated third party, totaling $419 at 6.0% per annum and recognized a gain on sale of $158.  In June 2012, we sold an office property located in Santa Fe, NM with 76,978 square feet for $1,250, excluding closing costs.  We provided mortgage financing to the buyer, an unrelated third party, totaling $1,000 at 5.0% per annum and recognized a gain on sale of $192.  In September 2012, we sold an office property located in Foxborough, MA with 208,850 square feet for $9,900, excluding closing costs, and recognized a gain on sale of $1,689.

As of September 30, 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, if such results are material.  Results of operations for the properties sold during 2012 are not material to our consolidated results of operations and are not included in discontinued operations.  Prior periods have been restated to reflect seven office properties and 20 industrial properties reclassified to continuing operations from discontinued operations during the fourth quarter of 2011.  Summarized income statement information for the three and nine months ended September 30, 2011, for properties sold in 2011 is as follows:

Income Statement:

	Three Months			Nine Months
	Ended			Ended
	September 30, 2011			September 30, 2011
Rental income	$	6,573		$	20,426
Operating expenses	(3,284		)	(9,428		)
Depreciation and amortization	(1,336		)	(4,467		)
General and administrative	(228		)	(717		)
Acquisition related costs	(5		)	(148		)
Operating income	1,720			5,666
Interest income	—			3
Income from discontinued operations	$	1,720		$	5,669