Commitments and Contingencies

In the normal course of business, we are involved in legal actions arising from the ownership of our industrial properties. In our opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on our consolidated financial position, operations or liquidity.

Four properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times at appraised fair market value or at a fixed purchase price. None of the tenant purchase options have been exercised.

At December 31, 2017, we had outstanding letters of credit and performance bonds in the aggregate amount of $20,188.

In conjunction with the development of industrial properties, we have entered into agreements with general contractors for the construction of industrial properties. At December 31, 2017, we had 11 industrial properties totaling approximately 4.2 million square feet of GLA under construction. The estimated total investment as of December 31, 2017 is approximately $291,000 (unaudited). Of this amount, approximately $175,800 (unaudited) remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated total investment.

During the year ended December 31, 2016, a fire significantly destroyed one industrial property totaling approximately 0.03 million square feet of GLA located in San Diego, California. In a separate event, on April 3, 2017, a fire caused significant damage to one industrial property totaling approximately 0.08 million square feet of GLA located in Los Angeles, California. During the respective periods in which the fires occurred, we wrote off the unamortized net book value of the building improvements for the damaged portions of the industrial properties and recorded a receivable from our insurance company for the amount of the write off, less our $25 deductible per occurrence. During the year ended December 31, 2017, we collected insurance proceeds in excess of the amounts we wrote off related to unamortized net book value of the building improvements.

Ground and Operating Lease Agreements

For the years ended December 31, 2017, 2016 and 2015, we recognized $1,419, $1,380 and $1,281, respectively, in operating and ground lease expense.

Future minimum rental payments under the terms of all non-cancelable ground and operating leases under which we are the lessee as of December 31, 2017 are as follows:



2018	$	1,495
2019	772
2020	678
2021	630
2022	583
Thereafter	27,139
Total ^(A)	$	31,297

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^(A)	Minimum rental payments have not been reduced by minimum sublease rentals of $783 due in the future under non-cancelable subleases.