ACQUISITIONS AND DISPOSITIONS

The fair value of real estate acquired is recorded to the acquired tangible assets, consisting primarily of land, land improvements, building and improvements, tenant improvements, and furniture, fixtures, and equipment, and identified intangible assets and liabilities, consisting of the value of acquired above-market and below-market leases, in-place leases and ground leases, 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.

2017 Transactions—On December 29, 2017, we acquired a 100% fee-simple interest in an office property known as 1130 Howard Street from an unrelated third-party. The office property has approximately 21,194 square feet and is located in San Francisco, California. The acquisition was funded with proceeds from our Series L Preferred Stock offering, and the acquired property is reported as part of the office segment (Note 20). During the fourth quarter of 2017, we early adopted ASU No. 2017-01 (Note 2) and, based on our analysis, the acquisition was an asset purchase and not a business combination. As such, transaction costs were capitalized as incurred in connection with this acquisition.



	Asset	Date of		Purchase
Property	Type	Acquisition	Square Feet	Price (1)
				(in thousands)
1130 Howard Street, San Francisco, CA	Office	December 29, 2017	21,194	$	17,717


(1)	Transaction costs that were capitalized and assumption of liabilities totaled $1,915,000, which are excluded from the purchase price above.

We sold 100% fee-simple interests in the following properties, other than 800 N Capitol, in which we sold a 100% leasehold interest, to unrelated third-parties. Transaction costs related to these sales were expensed as incurred.



Property	Asset Type	Date of Sale	Square Feet or Units (1)	Sales Price		Transaction Costs			Gain on Sale
				(in thousands)
211 Main Street, San Francisco, CA	Office	March 28, 2017	417,266	$	292,882	$	2,943	(2)	$	187,734
3636 McKinney Avenue, Dallas, TX	Multifamily	May 30, 2017	103	$	20,000	$	1,320	(2)	$	5,488
3839 McKinney Avenue, Dallas, TX	Multifamily	May 30, 2017	75	$	14,100	$	938	(2)	$	4,224
200 S College Street, Charlotte, NC	Office	June 8, 2017	567,865	$	148,500	$	833		$	45,906
980 9th and 1010 8th Street, Sacramento, CA	Office & Parking Garage	June 20, 2017	485,926	$	120,500	$	1,119		$	34,559
4649 Cole Avenue, Dallas, TX	Multifamily	June 23, 2017	334	$	64,000	$	3,311	(2)	$	25,836
800 N Capitol Street, Washington, D.C.	Office	August 31, 2017	311,593	$	119,750	$	2,388		$	34,456
7083 Hollywood Boulevard, Los Angeles, CA (3)	Office	September 21, 2017	82,193	$	42,300	$	584		$	23,670
47 E 34th Street, New York, NY	Multifamily	September 26, 2017	110	$	80,000	$	3,157		$	16,556
370 L'Enfant Promenade, Washington, D.C. (4)	Office	October 17, 2017	409,897	$	126,680	$	2,451		$	2,994
4200 Scotland Street, Houston, TX (3)	Multifamily	December 15, 2017	308	$	64,025	$	597		$	20,314


(1)	Reflects the square footage of office properties and number of units of multifamily properties.


(2)	Includes a prepayment penalty incurred in connection with the prepayment of the mortgage on the property in the amount of $1,508,000 at 211 Main Street, $1,143,000 at 3636 McKinney Avenue, $758,000 at 3839 McKinney Avenue, and $2,812,000 at 4649 Cole Avenue (Note 8).


(3)	A mortgage collateralized by this property was assumed by the buyer in connection with our sale of the property (Note 8).

(4)

In August 2017, we negotiated an agreement with an unrelated third-party for the sale of this property. We determined the book value of this property exceeded its estimated fair value less costs to sell, and as such, an impairment charge of $13,100,000 was recognized at such time for the year ended December 31, 2017 (Note 2). Our determination of fair value was based on the sales price negotiated with the third-party buyer.

In December 2017, we entered into a purchase and sale agreement with an unrelated third-party for the acquisition of a 100% fee-simple interest in an office property located at 9460 Wilshire Boulevard in Beverly Hills, California. At the time we entered into the purchase and sale agreement, we made a $20,000,000 non-refundable deposit to an escrow account and such deposit is included in other assets on our consolidated balance sheet at December 31, 2017. The acquisition subsequently closed in January 2018 for a purchase price of $132,000,000, which excludes transaction costs of $48,000 that were incurred and capitalized in connection with this acquisition. The property has approximately 68,866 square feet of office space and 22,884 square feet of retail space. The acquisition was funded with proceeds from our Series L Preferred Stock offering, and the acquired property will be reported as part of the office segment (Note 20).

2016 Transactions—There were no acquisitions during the year ended December 31, 2016.

We sold 100% fee-simple interests in the following properties to unrelated third-parties. Transaction costs related to these sales were expensed as incurred.



Property	Asset Type	Date of Sale	Rooms	Sales Price		Transaction Costs		Gain on Sale
				(in thousands)
Courtyard Oakland, Oakland, CA	Hotel	February 2, 2016	162	$	43,800	$	1,026	$	24,739
LAX Holiday Inn, Los Angeles, CA	Hotel	July 19, 2016	405	$	52,500	$	706	$	14,927

2015 Transactions—On August 26, 2015, we acquired a 100% fee-simple interest in a surface parking lot known as 2 Kaiser Plaza Parking Lot from an unrelated third-party. The parking lot has approximately 44,642 square feet of land and is located in Oakland, California. The acquisition was funded with proceeds from our unsecured credit facility, and the acquired property is reported as part of the office segment (Note 20). Transaction costs were expensed as incurred during the year ended December 31, 2015 related to this acquisition.

Property

Asset Type

Date of Acquisition

Square
Feet

Purchase Price

Transaction Costs

(in thousands)

2 Kaiser Plaza Parking Lot,
Oakland, CA

Surface
Parking Lot

August 26, 2015

44,642

11,143

107

We sold a 100% fee-simple interest in the following property to an unrelated third-party. Transaction costs related to the sale were expensed as incurred.

Property

Asset Type

Date of Sale

Square
Feet

Sales Price

Transaction Costs

Gain on Sale

(in thousands)

500 West Santa Ana Boulevard,
Santa Ana, CA

Office

November 19, 2015

37,116

8,050

264

3,092

The results of operations of the properties we sold have been included in the consolidated statements of operations through each properties' respective disposition date. The following is the detail of the carrying amounts of assets and liabilities at the time of the sales of the properties that occurred during the years ended December 31, 2017, 2016 and 2015:



	Year Ended December 31,
	2017		2016		2015
	(in thousands)
Assets
Investments in real estate, net	$	631,740	$	54,374	$	4,694
Deferred rent receivable and charges, net	34,071		—		—
Other intangible assets, net	11,283		528		—
Other assets	38		—		—
Total assets	$	677,132	$	54,902	$	4,694
Liabilities
Debt, net (1)	$	115,037	$	—	$	—
Other liabilities	14,029		—		—
Intangible liabilities, net	1,800		—		—
Total liabilities	$	130,866	$	—	$	—


(1)	Net of $665,000 of premium on assumed mortgage. Debt of $50,260,000 was assumed by certain buyers in connection with sales of certain properties.

The results of operations of the properties we acquired have been included in the consolidated statements of operations from the date of acquisition. The fair value of the net assets acquired for the aforementioned acquisitions during the years ended December 31, 2017, 2016 and 2015 are as follows:



	Year Ended December 31,
	2017 (1)			2016		2015 (1)
	(in thousands)
Land	$	8,290		$	—	$	10,931
Land improvements	—			—		110
Buildings and improvements	10,109			—		—
Tenant improvements	371			—		—
Acquired in-place leases (2)	1,184			—		102
Acquired above-market leases (3)	37			—		—
Acquired below-market leases (3)	(360		)	—		—
Net assets acquired	$	19,631		$	—	$	11,143


(1)	The purchase price of the acquisitions completed during the years ended December 31, 2017 and 2015 were individually less than 5% and in aggregate less than 10% of our total assets as of December 31, 2017 and 2015, respectively.


(2)	Acquired in-place leases have a weighted average amortization period of 5.0 years and 3.0 years for the 2017 and 2015 acquisitions, respectively.


(3)	Acquired above and below-market leases have a weighted average amortization period of 7.0 years and 2.0 years, respectively, for the 2017 acquisition.

Abandoned project costs of $16,000, $328,000 and $486,000 were expensed as incurred during the years ended December 31, 2017, 2016 and 2015, respectively.