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.

2019 Transactions—There were no acquisitions during the three months ended March 31, 2019.

We sold 100% fee-simple interests in the following properties to unrelated third-parties during the three months ended March 31, 2019. Transaction costs related to these sales were expensed as incurred.



Property	Asset Type	Date of Sale	Square Feet	Sales Price		Transaction Costs		Gain on Sale
				(in thousands)
March Oakland Properties, Oakland, CA (1)	Office / Parking Garage	March 1, 2019	975,596	$	512,016	$	8,971	$	289,779
830 1st Street, Washington, D.C.	Office	March 1, 2019	247,337	116,550		2,438		45,710
260 Townsend Street, San Francisco, CA	Office	March 14, 2019	66,682	66,000		2,539		42,092
				$	694,566	$	13,948	$	377,581


(1)	The "March Oakland Properties" consist of 1901 Harrison Street, 2100 Franklin Street, 2101 Webster Street, and 2353 Webster Street Parking Garage.

The results of operations of the properties we sold have been included in the consolidated statement of operations through each property's 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 three months ended March 31, 2019:



	(in thousands)
Assets
Investments in real estate, net	$	270,910
Deferred rent receivable and charges, net	32,284
Other intangible assets, net	316
Total assets	$	303,510
Liabilities
Debt, net (1) (2)	$	278,777
Total liabilities	$	278,777


(1)	Debt is presented net of deferred loan costs of $1,417,000 and accumulated amortization of $494,000.

(2)

A mortgage loan with an outstanding principal balance of $28,200,000 was assumed by the buyer in connection with the sale of our property in San Francisco, California. A mortgage loan with an outstanding principal balance of $46,000,000 was prepaid in connection with the sale of our property in Washington, D.C. that was collateral for the loan. Mortgage loans with an aggregate outstanding principal balance of $205,500,000 were legally defeased in connection with the sale of the March Oakland Properties that were collateral for the loans.

2018 Transactions—On January 18, 2018, we acquired a 100% fee-simple interest in an office property known as 9460 Wilshire Boulevard from an unrelated third-party. The property has approximately 68,866 square feet of office space and 22,884 square feet of retail space and is located in Beverly Hills, 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 18). We performed an analysis and, based on our analysis, we determined this acquisition was an asset purchase and not a business combination. As such, transaction costs were capitalized as incurred in connection with this acquisition.



Property	Asset Type	Date of Acquisition	Square Feet	Purchase Price (1)
				(in thousands)
9460 Wilshire Boulevard, Beverly Hills, CA	Office	January 18, 2018	91,750	$	132,000


(1)	In December 2017, at the time we entered into the purchase and sale agreement, we made a $20,000,000 non-refundable deposit to an escrow account that was included in other assets on our consolidated balance sheet at December 31, 2017. Transaction costs that were capitalized in connection with the acquisition of this property totaled $48,000, which are not included in the purchase price above.

The results of operations of the property we acquired during the three months ended March 31, 2018 have been included in the consolidated statement of operations from the date of acquisition. The purchase price of the acquisition completed during the three months ended March 31, 2018 was less than 10% of our total assets as of the most recent annual consolidated financial statements filed at or prior to the date of acquisition. The fair value of the net assets acquired for the aforementioned acquisition during the three months ended March 31, 2018 are as follows:



	(in thousands)
Land	$	52,199
Land improvements	756
Buildings and improvements	74,522
Tenant improvements	1,451
Acquired in-place leases (1)	7,003
Acquired above-market leases (1)	109
Acquired below-market leases (1)	(3,992		)
Net assets acquired	$	132,048


(1)	Acquired in-place leases, above-market leases, and below-market leases have weighted average amortization periods of 3 years, 2 years, and 3 years, respectively.

There were no dispositions during the three months ended March 31, 2018.

Assets Held for Sale

As noted above, in March 2019, we sold a 100% fee-simple interest in an office property located at 260 Townsend Street in San Francisco, California to an unrelated third-party. The office property had been classified as held for sale as of December 31, 2018, as the purchase and sale agreement was entered into and became subject to a non-refundable deposit prior to December 31, 2018.

We have entered into a purchase and sale agreement with an unrelated third-party for the sale of an office property located at 1333 Broadway in Oakland, California. The contracted sales price for this property is $115,430,000. The purchase and sale agreement was entered into and became subject to a non-refundable deposit prior to March 31, 2019. Therefore, the property has been classified as held for sale as of March 31, 2019. We expect the closing of this transaction to occur during the second quarter of 2019.

The following is the detail of the carrying amounts of assets and liabilities for the office properties that are classified as held for sale on our consolidated balance sheets as of March 31, 2019 and December 31, 2018:



	March 31, 2019		December 31, 2018
	(in thousands)
Assets
Investments in real estate, net (1)	$	48,253	$	17,123
Cash and cash equivalents	745		755
Accounts receivable, net	137		41
Deferred rent receivable and charges, net (2)	8,743		4,009
Other intangible assets, net (3)	—		220
Other assets	338		27
Total assets held for sale, net	$	58,216	$	22,175
Liabilities
Debt, net (4)	$	39,292	$	28,018
Accounts payable and accrued expenses	1,592		370
Due to related parties	204		81
Other liabilities	773		297
Total liabilities associated with assets held for sale, net	$	41,861	$	28,766


(1)	Investments in real estate of $64,363,000 and $24,832,000 at March 31, 2019 and December 31, 2018, respectively, are presented net of accumulated depreciation of $16,110,000 and $7,709,000, respectively.


(2)	Deferred rent receivable and charges consist of deferred rent receivable of $5,650,000 and deferred leasing costs of $4,370,000 net of accumulated amortization of $1,277,000 at March 31, 2019. Deferred rent receivable and charges consist of deferred rent receivable of $2,909,000 and deferred leasing costs of $1,669,000 net of accumulated amortization of $569,000 at December 31, 2018.


(3)	Other intangible assets, net, at December 31, 2018 represent acquired in-place leases of $1,778,000, which are presented net of accumulated amortization of $1,558,000.


(4)	Debt includes the outstanding principal balance of 1333 Broadway of $39,500,000, net of deferred loan costs of $287,000 and accumulated amortization of $79,000 at March 31, 2019. At December 31, 2018, debt includes the outstanding principal balance of 260 Townsend Street of $28,200,000, net of deferred loan costs of $243,000 and accumulated amortization of $61,000.

In May 2019, in connection with the potential sale to an unrelated third-party of 100% fee-simple interests in two office properties and one development site located in Washington, D.C., we determined the book value of such properties exceeded their estimated fair value and, as such, an impairment charge of $66,200,000 was recognized as of March 31, 2019. Our determination of fair value was based on negotiations with the third-party buyer during the potential sale. The purchase and sale agreement had not yet been finalized and the transaction was not subject to a non-refundable deposit as of March 31, 2019. Currently, the sale of these properties is expected to close during the second quarter of 2019.