Property, net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property, net

Property, net:

Property, net consists of the following:    

	September 30, 2022		December 31, 2021
Land	$	1,425,651	$	1,441,858
Buildings and improvements	6,362,667		6,306,764
Tenant improvements	703,448		685,242
Equipment and furnishings(1)	189,658		191,266
Construction in progress	219,183		222,420
	8,900,607		8,847,550
Less accumulated depreciation(1)	(2,735,812)		(2,563,344)
	$	6,164,795	$	6,284,206

(1)      Equipment and furnishings and accumulated depreciation include the cost and accumulated amortization of ROU assets in connection with finance leases at September 30, 2022 and December 31, 2021 (See Note 8—Leases).

Depreciation expense was $67,631 and $68,715 for the three months ended September 30, 2022 and 2021, respectively, and $202,804 and $211,139 for the nine months ended September 30, 2022 and 2021, respectively.

Gain on sale or write-down of assets, net for the three and nine months ended September 30, 2022 and 2021 consist of the following:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
Gain on property sales, net(1)	$	313	$	118,471	$	386	$	111,805
Loss on write-down of assets(2)	(5,148)		—		(15,006)		(38,362)
Gain on land sales, net	6,240		95		21,387		19,913
	$	1,405	$	118,566	$	6,767	$	93,356

(1)    Includes $117,242 and $4,229 of gain related to the sale of La Encantada and Paradise Valley Mall, respectively, during the three and nine months ended September 30, 2021, respectively (See Note 16-Dispositions).

(2)    Includes impairment loss of $5,471 relating to the Company's investment in MS Portfolio LLC (See Note 4-Investments in Unconsolidated Joint Ventures) and impairment loss of $27,281 on Estrella Falls during the nine months ended September 30, 2022 and 2021, respectively, and $5,140 on Towne Mall during the three and nine months ended September 30, 2022. The impairment losses were due to the reduction of the estimated holding periods of the properties. The remaining amounts for the three and nine months ended September 30, 2022 and 2021 mainly pertain to the write off of development costs.

The following table summarizes certain of the Company's assets that were measured on a nonrecurring basis as a result of the impairment losses recorded for the nine months ended September 30, 2022 and 2021, as described above:

	Total Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets		Significant Other Unobservable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
September 30, 2021	$	4,720	$	—	$	4,720	$	—
September 30, 2022	$	18,250	$	—	$	—	$	18,250

The fair values relating to a portion of the 2021 impairments were based on sales contracts and are classified within Level 2 of the fair value hierarchy. The fair value (Level 3 measurement) related to the 2022 impairment was based upon an income approach, using an estimated terminal capitalization rate, discount rate, and in-place contractual rent and other income. The fair value is sensitive to these significant unobservable inputs.