Note 2 - Operating Property Activities

6 Months Ended

Jun. 30, 2013

Business Combination Disclosure [Text Block]

Business Combination Disclosure [Text Block]

2. Operating Property Activities

Acquisitions -

During the six months ended June 30, 2013, the Company acquired the following properties, in separate transactions (in thousands):

			Purchase Price
Property Name	Location	Month Acquired	Cash			Debt Assumed	Other		Total			GLA*
Santee Trolley Square(1)	Santee, CA	Jan-13	$	26,863	$	48,456	$	22,681	$	98,000	311
Shops at Kildeer (2)	Kildeer, IL	Jan-13		-		32,724		-		32,724	168
Village Commons S.C.	Tallahassee, FL	Jan-13		7,100		-		-		7,100	125
Putty Hill Plaza (3)	Baltimore, MD	Jan-13		4,592		9,115		489		14,196	91
Columbia Crossing II S.C.	Columbia, MD	Jan-13		21,800		-		-		21,800	101
Roseville Plaza (Parcel)	Roseville, MN	Jan-13		5,143		-		-		5,143	80
Wilton River Park (4)	Wilton, CT	Mar-13		777		36,000		5,223		42,000	187
Canyon Square (5)	Santa Clarita, CA	Apr-13		1,950		13,800		-		15,750	97
JTS Portfolio (6)	Baton Rouge, LA	Apr-13		-		43,267		11,733		55,000	520
Factoria Mall (7)	Bellevue, WA	May-13		37,283		56,000		37,467		130,750	510
6 Out-parcels	Various	Jun-13		13,053		-		-		13,053	97
			$	118,561	$	239,362	$	77,593	$	435,516	2,287

* Gross leasable area ("GLA")

(1)	This property was acquired from a joint venture in which the Company had a 45% noncontrolling interest.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $22.7 million, before income tax, from the fair value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase price above in Other.
(2)	This property was acquired from a joint venture in which the Company had a 19% 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.
(3)	The Company acquired the remaining 80% interest in an operating property from an unconsolidated joint venture in which the Company had a 20% noncontrolling interest.  The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $0.5 million from the fair value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase price above in Other.
(4)	The acquisition of this property included the issuance of $5.2 million of redeemable units, which are redeemable at the option of the holder after one year and earn a yield of 6% per annum, which is included in the purchase price above in Other. In connection with this transaction, the Company provided the sellers a $5.2 million loan at a rate of 6.5%, which is secured by the redeemable units.
(5)	This property was acquired from a joint venture in which the Company has a 15% 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)	The Company acquired the remaining interest in a portfolio of office properties 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 and as such recognized a change in control loss of $9.6 million from the fair value adjustment associated with the Company’s original ownership, which is reflected in the purchase price above in Other. The debt assumed in connection with this transaction of $43.3 million was repaid in April 2013.
(7)	The Company acquired an additional 49% interest in this operating property from an unconsolidated joint venture in which the Company had a 50% noncontrolling interest. As such the Company now consolidates this investment. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a result, recognized a gain of $8.2 million from the fair value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase price above in Other.

The aggregate purchase price of the properties acquired during the six months ended June 30, 2013 has been allocated as follows (in thousands):

Land	$	128,048
Buildings		226,155
Above Market Rents		10,403
Below Market Rents		(14,178	)
In-Place Leases		19,497
Building Improvements		57,884
Tenant Improvements		11,466
Mortgage Fair Value Adjustment		(3,884	)
Other Assets		1,405
Other Liabilities		(1,280	)
	$	435,516

During the six months ended June 30, 2013, the Company acquired the remaining ownership interest in FNC Realty Corporation (“FNC”) of 17.3% for $20.3 million. As a result of this transaction the Company now owns 100% of FNC. The Company had previously and continues to consolidate FNC. Since there was no change in control from this transaction, the purchase of the additional interest resulted in a decrease in noncontrolling interest of $19.6 million and a decrease in the Company’s Paid-in capital of $0.7 million during 2013.

Additionally, during the six months ended June 30, 2013, the Company acquired the remaining interest in three previously consolidated joint ventures for $6.5 million. The Company continues to consolidate these entities as there was no change in control from these transactions. The purchase of the remaining partnership interests resulted in an aggregate decrease in noncontrolling interest of $0.4 million and an aggregate decrease of $4.8 million, after income taxes, to the Company’s Paid-in capital, during the six months ended June 30, 2013.

Dispositions –

During the six months ended June 30, 2013, the Company disposed of 13 operating properties, in separate transactions, for an aggregate sales price of $100.8 million. These transactions, which are included in Discontinued Operations, resulted in an aggregate gain of $4.4 million and impairment charges of $20.8 million, after income taxes.

Additionally, during the six months ended June 30, 2013, the Company disposed of two land parcels for an aggregate sales price of $10.9 million and recognized impairment charges of $0.3 million related to these transactions.

Impairment Charges -

During the six months ended June 30, 2013, the Company recognized aggregate impairment charges of $35.5 million, which are included in Impairment charges under Operating expenses on the Company’s Condensed Consolidated Statements of Income, relating to (i) two land parcels and four operating properties based upon purchase price offers aggregating $39.5 million, and (ii) a cost method investment, based upon a fair value estimate of $7.0 million using a discounted cash flow model (see Footnote 12). The operating property impairments resulted from the Company’s efforts to market certain assets and management’s assessment as to the likelihood and timing of such potential transactions. The impairment of the cost method investment was based upon a review of the underlying cause of the decline in value, as well as the severity and duration of the decline. As a result of such review, the Company determined that the decline was deemed to be other-than-temporary.