Note 2 - Operating Property Activities

9 Months Ended

Sep. 30, 2012

Business Combination Disclosure [Text Block]

2. Operating Property Activities

Acquisitions -

During the nine months ended September 30, 2012, the Company acquired the following properties, in separate transactions (in thousands):

			Purchase Price
Property Name	Location	Month Acquired	Cash		Debt Assumed		Total		GLA*
Woodbridge S.C.	Sugarland, TX	Jan-12	$	9,000	$	-	$	9,000		97
Bell Camino Center	Sun City, AZ	Jan-12		4,185		4,210		8,395		63
Olympia West Outparcel	Olympia, WA	Feb-12		1,200		-		1,200		6
Frontier Village (1)	Lake Stevens, WA	Mar-12		12,231		30,900		43,131		195
Silverdale S.C. (1)	Silverdale, WA	Mar-12		8,335		24,000		32,335		170
31 parcels (2)	Various	Jan-12		30,753		-		30,753		83
1 parcel (3)	Duncan, SC	Jan-12		1,048		-		1,048		3
30 parcels (2)	Various	Mar-12		39,493		-		39,493		107
1 parcel (3)	Peru, IL	Mar-12		995		-		995		4
Towson Place (4)	Towson, MD	Apr - 12		69,375		57,625		127,000		680
Prien Lake Outparcel	Lake Charles, LA	May - 12		1,800		-		1,800		8
Devon Village	Devon, PA	June -12		28,550		-		28,550		79
4 Properties	Various, NC	June - 12		63,750		-		63,750		368
Lake Jackson (5)	Lake Jackson, TX	July - 12		5,500		-		5,500		35
Woodlawn S.C.	Charlotte, NC	July - 12		7,050		-		7,050		137
Columbia Crossing - 2 Outparcels	Columbia, MD	July - 12		11,060		-		11,060		69
Pompano Beach (6)	Pompano Beach, FL	July - 12		12,180		-		12,180		81
6 Parcels (2)	Various	July - 12		8,111		-		8,111		19
Wilton S.C.	Wilton, CT	Aug - 12		18,800		20,900		39,700		96
Hawthorne Hills S. C.	Vernon Hills, IL	Aug - 12		15,974		21,563		37,537		193
			$	349,390	$	159,198	$	508,588		2,493

* Gross leasable area ("GLA")

(1)   These properties were acquired from a joint venture in which the Company has a 15% noncontrolling interest.  The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as such recognized an aggregate gain of  $2.0 million from the fair value adjustment associated with its original ownership due to a change in control which is included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Income.

(2)   Acquired an aggregate of 67 parcels net leased to restaurants through a consolidated joint venture, in which the Company has a 99.1% controlling interest.  During July 2012, the Company purchased the remaining 0.9% interest for $0.7 million.

(3)   Acquired an aggregate of two parcels net leased to restaurants through a consolidated joint venture, in which the Company has a 92.0% controlling interest.  During July 2012, the Company sold 4% of its interest for $0.1 million.  The Company continues to have a controlling interest in the joint venture and therefore continues to consolidate this investment.

(4)   This property was acquired from a joint venture in which the Company had a 30% noncontrolling interest.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $12.1 million from the fair value adjustment associated with its original ownership due to a change in control.  In addition, the Company recognized promote income of $1.1 million in connection with this transaction.  The gain and promote income are included in Equity in income of joint ventures, net on the Company’s Condensed Consolidated Statements of Income.   Additionally, the debt assumed in connection with this transaction of $57.6 million was repaid in May 2012.

(5)   The Company acquired this property from a preferred equity investment in which the Company held a noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance.  This transaction resulted in a change in control with no gain or loss recognized.

(6)   This property was acquired from a joint venture in which the Company had a 50% noncontrolling interest.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance.  This transaction resulted in a change in control with no gain or loss recognized.

The aggregate purchase price of the properties acquired during the nine months ended September 30, 2012 has been allocated as follows (in thousands):

Land	$	164,990
Buildings		250,505
Above Market Rents		12,556
Below Market Rents		(35,735	)
In-Place Leases		26,128
Building Improvements		78,687
Tenant Improvements		15,615
Mortgage Fair Value Adjustment		(4,158	)
	$	508,588

Additionally, during the nine months ended September 30, 2012, the Company acquired, in separate transactions, the remaining interest in four separate consolidated joint ventures for $8.7 million.  There was no change in control as a result of these transactions and as such the purchase of the remaining interest in these joint ventures resulted in a decrease in noncontrolling interest of $7.4 million and an increase to the Company’s Paid-in capital of $0.2 million.

FNC Realty Corporation –

During the nine months ended September 30, 2012, the Company acquired an additional 13.00% interest in FNC Realty Corporation (“FNC”) for $14.6 million, which increased the Company’s total ownership interest to 82.08%.  The Company had previously and continues to consolidate FNC.

Dispositions –

During the nine months ended September 30, 2012, the Company disposed of 30 operating properties and two outparcels, in separate transactions, for an aggregate sales price of $234.0 million. These transactions, which are included in Discontinued Operations, resulted in an aggregate gain of $36.5 million and impairment charges of $14.3 million.

Additionally, during the nine months ended September 30, 2012, the Company disposed of four land parcels and two outparcels for an aggregate sales price of $7.1 million and recognized an aggregate gain of $2.0 million and impairment charges of $0.3 million related to these transactions. The gains from these transactions are recorded as other income, which is included in Other expense, net, and the impairment charges have been recorded as Impairment charges in the Company’s Condensed Consolidated Statements of Income.  The Company provided seller financing in connection with the sale of one of the land parcels for $1.75 million, which bears interest at a rate of 6.5% for the first six months and 7.5% for the remaining term, and is scheduled to mature in November 2012.  The Company evaluated this transaction pursuant to the FASB’s real estate sales guidance and concluded that the criteria for sale recognition was met.  

Also, during the nine months ended September 30, 2012, the Company sold a land parcel in San Juan del Rio, Mexico for a sales price of 24.3 million Mexican Pesos (“MXN”) (USD $1.9 million).  The Company recognized a gain of MXN 5.7 million (USD $0.4 million) on this transaction.   The gain from this transaction is recorded as other income, which is included in Other expense, net, in the Company’s Condensed Consolidated Statements of Income.

During the nine months ended September 30, 2012, the Company sold a previously consolidated operating property to a newly formed unconsolidated joint venture in which the Company has a 20% noncontrolling interest for a sales price of $55.5 million.  This transaction resulted in a pre-tax gain of $10.0 million, of which the Company deferred $2.0 million due to its continued involvement.  This gain has been recorded as Gain on sale of operating properties, net of tax in the Company’s Condensed Consolidated Statements of Income.

Impairment Charges -

In addition to the impairment charges described above, during the nine months ended September 30, 2012, the Company recognized an aggregate impairment charge of $22.2 million relating to its investment in three operating properties, which are included in Operating expenses in the Company’s Condensed Consolidated Statements of Income.  The aggregate book value of these properties was $38.3 million. The estimated aggregate fair value of these properties is based upon purchase price offers and comparable sales information aggregating $16.1 million.  These impairment charges resulted from the Company’s efforts to market certain assets and management’s assessment as to the likelihood and timing of such potential transactions (see Footnote 14).