4. ACQUISITIONS

The fair value of real estate acquired is recorded to (1) the acquired tangible assets, consisting of land; land improvements; building and improvements; furniture, fixtures, and equipment; tenant improvements; and (2) identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and tenant relationships, if any, based in each case on their respective fair values. Loan premiums, in the case of above-market rate loans, or loan discounts, in the case of below-market rate loans, are recorded based on the fair value of any loans assumed in connection with acquiring the real estate. Above-market ground leases are recorded based on the respective fair value of the ground leases.

We acquired an office property in 2005 for approximately $120,800,000, paying approximately $41,000,000 in cash and assuming two mortgage loans totaling $79,800,000. The $41,000,000 cash portion of the purchase price was paid by making (a) an approximately $1,000,000 equity investment in the existing property owner and (b) a loan to the existing property owner of approximately $40,000,000, which was converted to equity in 2012. We currently directly own 100% of the property. Prior to the conversion to equity in December 2012, the office property was included in our consolidated financial statements as a variable interest entity.

In October 2013, we foreclosed on the LAX Holiday Inn, a select service hotel, and acquired a 100% fee-simple interest. A subsidiary of CIM Commercial was the first-mortgage lender of the note secured by the hotel. Built in 1973, this hotel has 405 rooms and is located in the LAX submarket of Los Angeles, California.

Acquisitions, funded with proceeds from drawdowns on our unsecured credit facilities during 2014 consisted of the following:

Property

Asset
Type

Date of
Acquisition

Number of
Buildings

Rentable
Square
Feet

Purchase
Price

(in thousands)

4750 Wilshire Boulevard, Los Angeles, CA(1)

Office

April 18, 2014

143,361

44,936

Lindblade Media Center Los Angeles, CA(2)

Office

October 21, 2014

32,428

18,500

(1)	100% fee-simple interest in an office building built in 1984 and renovated in 2014, located in the Mid-Wilshire submarket of Los Angeles, California.

(2)	100% fee-simple interest in a portfolio of creative office buildings located in the West Los Angeles submarket of Los Angeles, California. Two of the buildings were built in 1930 and the third was built in 1957. The buildings were renovated in 2010.

The income and expenses related to the first-mortgage on the LAX Holiday Inn acquired by CIM Commercial through foreclosure in October 2013 are included in the consolidated statements of operations and comprehensive income up until the date we took possession of the hotel. The results of the operations of the properties acquired have been included in the consolidated statements of operations and comprehensive income from the date of acquisition. There were no assets acquired or liabilities assumed during the year ended December 31, 2012. The fair value of the assets acquired and liabilities assumed for the above-noted acquisitions during the year ended December 31, 2014, and 2013, respectively, are as follows:

	Year Ended December 31,
	2014 Acquisitions(1)			2013 Acquisition(1)
	(in thousands)
Land	$	22,975		$	15,662
Land improvements		535			436
Buildings and improvements		38,821			20,256
Tenant improvements		1,197			—
Furniture, fixtures, and equipment		—			2,481
Advance bookings		—			251
Working capital		—			1,014
Acquired in-place leases(2)		2,396			—
Acquired below-market leases(3)		(2,488	)		—
Note receivable		—			(40,100	)

Net assets acquired	$	63,436		$	—

(1)	The purchase price of the two acquisitions and the LAX Holiday Inn foreclosure completed during the years ended December 31, 2014 and 2013, respectively, were individually less than 5% and in aggregate less than 10% of our total assets as of December 31, 2014 and 2013, respectively.
(2)	In-place leases have a weighted average amortization period of 5.1 years.
(3)	Below-market leases have a weighted average amortization period of 5.0 years.

Acquisition related expenses of $491,000 associated with the acquisitions of real estate in 2014 were expensed as incurred during the year ended December 31, 2014. Foreclosure related expenses of $1,393,000 related to the LAX Holiday Inn foreclosure were expensed as incurred during the year ended December 31, 2013. Acquisition related costs of $632,000 associated with the conversion of the office property were expensed as incurred during the year ended December 31, 2012.

Abandoned project costs of $132,000 were expensed as incurred during the year ended December 31, 2014.