Real Estate Properties

9 Months Ended

Sep. 30, 2014

Real Estate [Abstract]

Real Estate Properties

Real Estate Properties

During the nine months ended September 30, 2014, we made improvements to our properties totaling $65.9 million. During the nine months ended September 30, 2013, we made improvements totaling $75.4 million 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:

We classify all properties that meet the criteria outlined in the Property, Plant and Equipment Topic of the FASB Accounting Standards Codification, or the Codification, as held for sale, as such on our condensed consolidated balance sheets.  As of September 30, 2014, we had no properties classified as held for sale. 

During March 2014, the former management team ceased to actively market two CBD properties (two buildings) and 29 suburban properties (65 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 Prior Trustees were removed in March 2014.  These properties were reclassified to properties held and used in operations because they no longer meet 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 includes the elimination of estimated costs to sell.

On June 27, 2014, we sold one central business district (CBD) property (two buildings) and 13 suburban properties (41 buildings) with a combined 2,784,098 square feet for an aggregate sales price of $215.9 million, excluding mortgage debt repayments and closing costs.  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.  These properties were previously classified as held for sale as of both March 31, 2014 and December 31, 2013.

Results of operations for properties sold or held for sale for all periods presented are included in discontinued operations in our condensed consolidated statements of operations. Summarized balance sheet information for all properties classified as held for sale and income statement information for all properties sold is as follows (in thousands):

	December 31, 2013
Real estate properties	$	536,552
Acquired real estate leases	6,937
Rents receivable	14,180
Other assets, net	15,862
Properties held for sale	$	573,531
Mortgage notes payable	$	20,018
Assumed real estate lease obligations	2,070
Rent collected in advance	4,043
Security deposits	2,603
Liabilities related to properties held for sale	$	28,734

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Rental income	$	(16	)	$	13,462		$	14,220		$	44,096
Tenant reimbursements and other income	407			1,697			1,730			5,509
Total revenues	391			15,159			15,950			49,605
Operating expenses	261			9,699			7,115			31,291
Depreciation and amortization	—			3,842			—			11,725
General and administrative	6			1,088			9			3,544
Total expenses	267			14,629			7,124			46,560
Operating income	124			530			8,826			3,045
Interest and other income	2			1			2			13
Interest expense	(31		)	(436		)	(608		)	(1,326		)
Income from discontinued operations	$	95		$	95		$	8,220		$	1,732