Note 4. 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 nine months ended September 30, 2013.

During the nine months ended September 30, 2013, we made improvements totaling $75,431 to our properties, including improvements made by SIR to its properties for the period that SIR was our consolidated subsidiary, which was until July 2, 2013.

Property Sales:

During the nine months ended September 30, 2013, we sold nine properties (27 buildings) with a combined 2,394,680 square feet and two land parcels for an aggregate sale price of $46,712, excluding closing costs. Details of these completed sales are as follows:

· In January 2013, we sold three suburban office and industrial properties (18 buildings) in suburbs of Detroit, MI with a combined 1,060,026 square feet for $10,250, excluding closing costs. In connection with the sale of these properties, we provided mortgage financing to the buyer, an unrelated third party, totaling $7,688 at 6.0% per annum and recognized a gain on sale of $1,277.

· As a result of an eminent domain taking in March 2013, we sold a land parcel adjacent to one of our central business district, or CBD, properties located in Boston, MA for $1,806, excluding closing costs, and recognized a gain on sale of $1,596.

· In April 2013, we sold a suburban property (one building) with 618,000 square feet for $830, excluding closing costs.

· In May 2013, we sold a suburban property (one building) with 57,250 square feet for $4,025, excluding closing costs.

· In June 2013, we sold a suburban property (two buildings) with a combined 356,045 square feet for an aggregate sale price of $16,300, excluding closing costs.

· Also in June 2013, we sold a suburban property (one building) with 30,105 square feet for $1,600, excluding closing costs, and recognized a gain on sale of $317.

· Also in June 2013, we sold a suburban property (one building) with 143,802 square feet for $5,250, excluding closing costs.

· Also in June 2013, we sold a parcel of land in Tukwila, WA for $2,551, excluding closing costs, and recognized a gain on sale of $1,765.

· In August 2013, we sold a suburban property (three buildings) with a combined 129,452 square feet for $4,100, excluding closing costs.

We classify all properties that meet the criteria outlined in the Property, Plant and Equipment Topic of the FASB Accounting Standards CodificationTM, or the Codification, as held for sale as such on our condensed consolidated balance sheets. As of December 31, 2012, we had one CBD property (one building) and 39 suburban properties (93 buildings) with a combined 6,673,851 square feet held for sale. As of September 30, 2013, we had four CBD properties (five buildings) and 72 suburban properties (172 buildings) with a combined 12,704,719 square feet held for sale. As of November 4, 2013, we have sold 29 of these properties (65 buildings) with a combined 4,201,777 square feet for an aggregate sale price of $111,400, excluding closing costs. In addition, as of November 4, 2013, we have two of these properties (two buildings) with a combined 77,394 square feet under agreement to sell for an aggregate sale price of $2,050, excluding closing costs. We expect to complete the sale of these two properties currently under agreement for sale by year end 2013 and the remaining 45 properties listed for sale by mid-year 2014; however, no assurance can be given that these properties will be sold in those time periods or at all, or what the ultimate terms of those sales may be. Results of operations for properties sold or held for sale are included in discontinued operations in our condensed consolidated statements of operations once the criteria for discontinued operations in the Presentation of Financial Statements Topic of the Codification are met. Summarized balance sheet information for all properties classified as held for sale and income statement information for properties held for sale or sold is as follows:

Balance Sheets:

	September 30, 2013		December 31, 2012
Real estate properties	$	631,057	$	164,041
Acquired real estate leases	9,416		453
Rents receivable	16,941		2,791
Other assets, net	20,836		4,547
Properties held for sale	$	678,250	$	171,832

Mortgage notes payable, net	$	20,127	$	—
Assumed real estate lease obligations	2,328		21
Rent collected in advance	4,202		854
Security deposits	3,665		1,464
Liabilities related to properties held for sale	$	30,322	$	2,339

Statements of Operations:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Rental income	$	27,619		$	34,859		$	89,399		$	105,694
Operating expenses	(17,417		)	(20,572		)	(54,226		)	(59,533		)
Depreciation and amortization	(8,157		)	(11,084		)	(24,289		)	(33,717		)
General and administrative	(1,761		)	(2,027		)	(5,553		)	(6,076		)
Operating income	284			1,176			5,331			6,368

Interest and other income	1			—			13			80
Interest expense	(313		)	(402		)	(954		)	(1,557		)
(Loss) income from discontinued operations	$	(28	)	$	774		$	4,390		$	4,891