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Investments in Real Estate and Real Estate Under Construction
 12 Months Ended
Dec. 31, 2014
Real Estate Investments, Net [Abstract]  
Investments in Real Estate and Real Estate Under Construction
Investments in Real Estate and Real Estate Under Construction

The Company's real estate, net, consists of the following at December 31, 2014 and 2013:
 
 
2014
 
2013
Real estate, at cost:
 
 
 
 
Buildings and building improvements
 
$
2,895,585

 
$
3,008,709

Land, land estates and land improvements
 
755,168

 
793,418

Fixtures and equipment
 
5,861

 
5,861

Construction in progress
 
14,946

 
4,306

Real estate intangibles:
 
 
 
 
In-place lease values
 
473,377

 
486,743

Tenant relationships
 
133,796

 
172,640

Above-market leases
 
98,393

 
102,774

Investments in real estate under construction
 
106,238

 
74,350

 
 
4,483,364

 
4,648,801

Accumulated depreciation and amortization(1)
 
(1,196,114
)
 
(1,223,381
)
Real estate, net
 
$
3,287,250

 
$
3,425,420

(1)
Includes accumulated amortization of real estate intangible assets of $400,628 and $447,764 in 2014 and 2013, respectively. The estimated amortization of the above real estate intangible assets for the next five years is $35,894 in 2015, $30,221 in 2016, $26,905 in 2017, $23,179 in 2018 and $18,014 in 2019.

The Company had below-market leases, net of accumulated accretion, which are included in deferred revenue, of $54,414 and $59,781, respectively as of December 31, 2014 and 2013. The estimated accretion for the next five years is $4,383 in 2015, $3,312 in 2016, $2,918 in 2017, $2,911 in 2018 and $2,603 in 2019.
The Company completed the following acquisitions and build-to-suit transactions during 2014 and 2013:
2014:
 
 
 
 
 
 
 
 
 
Real Estate Intangible
Property Type
Location
Acquisition/Completion Date
Initial Cost Basis
Lease Expiration
Land and Land Estate
 
Building and Improvements
 
Lease in-place Value
Industrial
Rantoul, IL
January 2014
$
41,277

10/2033
$
1,304

 
$
32,562

 
$
7,411

Office
Parachute, CO
January 2014
$
13,928

10/2032
$
1,400

 
$
10,751

 
$
1,777

Office
Rock Hill, SC
March 2014
$
24,715

03/2034
$
1,601

 
$
18,989

 
$
4,125

Industrial
Lewisburg, TN
May 2014
$
13,320

03/2026
$
173

 
$
10,865

 
$
2,282

Industrial
North Las Vegas, NV
May 2014
$
28,249

09/2034
$
3,244

 
$
21,444

 
$
3,561

Industrial
Bingen, WA
May 2014
$
20,391

05/2024
$
—

 
$
18,075

 
$
2,316

Land
New York, NY
October 2014
$
30,426

10/2113
$
22,000

 
$
—

 
$
8,426

Rehab Hospital
Vineland, NJ
October 2014
$
19,100

02/2043
$
2,698

 
$
12,790

 
$
3,612

Industrial
Anniston, AL
December 2014
$
20,907

11/2029
$
1,201

 
$
16,771

 
$
2,935

 
 
 
$
212,313

 
$
33,621

 
$
142,247

 
$
36,445

 
 
 
 
 
 
 
 
 
 
Weighted-average life of intangible assets (years)
 
 
 
 
 
37.5




2013:
 
 
 
 
 
 
 
 
 
Real Estate Intangibles
Property Type
Location
Acquisition/Completion Date
Initial Cost Basis
Lease Expiration
Land and Land Estate
 
Building and Improvements
 
Above Market Lease Value
 
Lease in-place Value
Industrial
Long Island City, NY
February 2013
$
42,124

03/2028
$
—

 
$
42,124

 
$
—

 
$
—

Industrial
Houston, TX
March 2013
$
81,400

03/2038
$
15,055

 
$
57,949

 
$
—

 
$
8,396

Office (1)
Denver, CO
April 2013
$
34,547

04/2028
$
2,207

 
$
26,724

 
$
—

 
$
5,616

Retail(2)
Tuscaloosa, AL
May 2013
$
8,397

05/2028
$
2,793

 
$
5,604

 
$
—

 
$
—

Land(3)
New York, NY
October 2013
$
302,000

10/2112
$
224,935

 
$
—

 
$
—

 
$
77,065

Land
Danville, VA
October 2013
$
4,727

01/2029
$
3,454

 
$
—

 
$
673

 
$
600

Retail(4)
Albany, GA
November 2013
$
7,074

11/2028
$
1,468

 
$
5,606

 
$
—

 
$
—

Office(5)
Various
December 2013
$
13,144

12/2033
$
1,522

 
$
10,374

 
$
—

 
$
1,248

Office
Omaha, NE
December 2013
$
39,125

11/2033
$
2,058

 
$
32,343

 
$
—

 
$
4,724

 
 
 
$
532,538

 
$
253,492

 
$
180,724

 
$
673

 
$
97,649

 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average life of intangible assets (years)
 
 
 
 
 
15.3

 
82.5


(1)
The Company incurred additional tenant related costs of $3,825.
(2)
The Company incurred leasing costs of $323. The property was sold in September 2013.
(3)
Includes three properties.
(4)
The Company incurred leasing costs of $338.
(5)
Includes four properties. One property was under construction at December 31, 2013, $1,969 of construction in progress costs are included in building and improvements above.

The Company recognized aggregate acquisition and pursuit expenses of $1,901 and $1,349 in 2014 and 2013, respectively, which are included in property operating expenses within the Company's Consolidated Statements of Operations.

The Company is engaged in various forms of build-to-suit development activities. The Company may enter into the following acquisition, development and construction arrangements: (1) lend funds to construct build-to-suit projects subject to a single-tenant lease and agree to purchase the properties upon completion of construction and commencement of a single-tenant lease, (2) hire developers to construct built-to-suit projects on owned properties leased to single tenants, (3) fund the construction of build-to-suit projects on owned properties pursuant to the terms in single-tenant lease agreements or (4) enter into purchase and sale agreements with developers to acquire single-tenant build-to-suit properties upon completion.
As of December 31, 2014, the Company had the following development arrangements outstanding:
Location
Property Type
Square Feet
 
Expected Maximum Commitment/Contribution
 
Lease Term (Years)
 
Estimated Completion Date
Oak Creek, WI
Industrial
164,000

 
$
22,609

 
20
 
2Q 15
Thomson, GA
Industrial
208,000

 
$
10,245

 
15
 
2Q 15
Richmond, VA
Office
330,000

 
$
110,137

 
15
 
3Q 15
Lake Jackson, TX
Office/R&D
664,000

 
$
166,164

 
20
 
4Q 16
 
 
1,366,000

 
$
309,155

 
 
 
 


The Company has variable interests in certain developer entities constructing the facilities but is not the primary beneficiary of the entities as the Company does not have a controlling financial interest. As of December 31, 2014 and 2013, the Company's aggregate investment in development arrangements was $106,238 and $74,350, respectively, which includes $2,828 and $1,472 of interest capitalized, respectively, and is presented as investments in real estate under construction in the accompanying Consolidated Balance Sheets.

On September 1, 2012, the Company, together with an operating partnership subsidiary, acquired the remaining common equity interest in Net Lease Strategic Assets Fund L.P. (“NLS”) from Inland American (Net Lease) Sub, LLC that the Company did not already own for a cash payment of $9,438 and the assumption of all outstanding liabilities. The Company recognized a gain on the transaction in the Consolidated Statement of Operations of $167,864 primarily related to the revaluation of the Company's equity interest in NLS for the difference between its carrying value in NLS and the fair value of its ownership interest at acquisition.