Investment in Real Estate | 6 Months Ended |
Jun. 30, 2014 |
Real Estate Investment Property, Net [Abstract] | ' |
Investment in Real Estate | ' |
3. Investment in Real Estate |
Acquisitions |
During the six months ended June 30, 2014, we acquired three industrial properties comprising approximately 0.5 million square feet of GLA and several land parcels. The purchase price of these acquisitions totaled approximately $31,101, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. The purchase price of the industrial properties and land parcels acquired was allocated as follows: |
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| Six Months Ended June 30, 2014 | | | | | | | | | | | | | | |
Land | $ | 7,695 | | | | | | | | | | | | | | | |
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Building and Improvements | 16,946 | | | | | | | | | | | | | | | |
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Other Assets | 897 | | | | | | | | | | | | | | | |
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Deferred Leasing Intangibles, Net | 5,563 | | | | | | | | | | | | | | | |
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Total Purchase Price | $ | 31,101 | | | | | | | | | | | | | | | |
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Intangible Assets (Liabilities) Subject To Amortization in the Period of Acquisition |
The fair value at the date of acquisition of in-place leases, tenant relationships, a below market ground lease obligation and above and below market leases recorded due to the real estate properties acquired for the six months ended June 30, 2014, which are recorded as deferred leasing intangibles, are as follows: |
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| Six Months Ended June 30, 2014 | | | | | | | | | | | | | | |
In-Place Leases | $ | 2,660 | | | | | | | | | | | | | | | |
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Tenant Relationships | $ | 1,620 | | | | | | | | | | | | | | | |
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Above Market Leases | $ | 219 | | | | | | | | | | | | | | | |
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Below Market Ground Lease Obligation | $ | 1,854 | | | | | | | | | | | | | | | |
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Below Market Leases | $ | (790 | ) | | | | | | | | | | | | | | |
The weighted average life, in months, of in-place leases, tenant relationships, a below market ground lease obligation and above and below market leases recorded at the time of acquisition as a result of the real estate properties acquired for the six months ended June 30, 2014 is as follows: |
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| Six Months Ended June 30, 2014 | | | | | | | | | | | | | | | | |
In-Place Leases | 71 | | | | | | | | | | | | | | | | |
Tenant Relationships | 130 | | | | | | | | | | | | | | | | |
Above Market Leases | 83 | | | | | | | | | | | | | | | | |
Below Market Ground Lease Obligation | 480 | | | | | | | | | | | | | | | | |
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Below Market Leases | 71 | | | | | | | | | | | | | | | | |
Sales and Discontinued Operations |
During the six months ended June 30, 2014, we sold two industrial properties comprising approximately 0.03 million square feet of GLA. Gross proceeds from the sales of the industrial properties were approximately $1,655. The gain on sale of real estate was approximately $714. The two sold industrial properties meet the criteria to be included in discontinued operations. Therefore the results of operations and gain on sale of real estate for the two industrial properties sold are included in discontinued operations. |
At June 30, 2014, we had two industrial properties comprising approximately 0.1 million square feet of GLA held for sale. The results of operations of these industrial properties held for sale at June 30, 2014 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold. |
Income from discontinued operations for the six months ended June 30, 2013 reflects the results of operations of the two industrial properties that were sold during the six months ended June 30, 2014, the results of operations of the 65 industrial properties that were sold during the year ended December 31, 2013, the results of operations of the two industrial properties identified as held for sale at June 30, 2014 and the net gain on sale of real estate relating to 12 industrial properties that were sold during the six months ended June 30, 2013. |
The following table discloses certain information regarding the industrial properties included in our discontinued operations for the three and six months ended June 30, 2014 and 2013: |
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| Three Months Ended June 30, 2014 | | Three Months Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | | |
Total Revenues | $ | 154 | | | $ | 3,181 | | | $ | 315 | | | $ | 6,722 | | | |
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Property Expenses | 161 | | | (1,309 | ) | | 156 | | | (2,756 | ) | | |
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Impairment of Real Estate | — | | | (1,605 | ) | | — | | | (1,605 | ) | | |
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Depreciation and Other Amortization | (59 | ) | | (1,085 | ) | | (122 | ) | | (2,405 | ) | | |
Gain on Sale of Real Estate | 282 | | | 13,481 | | | 714 | | | 10,407 | | | |
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Income from Discontinued Operations | $ | 538 | | | $ | 12,663 | | | $ | 1,063 | | | $ | 10,363 | | | |
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At June 30, 2014 and December 31, 2013, we had notes receivable and accrued interest outstanding, issued in connection with sales of industrial properties, of approximately $25,656 and $52,605, net of a discount of $0 and $191, respectively, which are included as a component of prepaid expenses and other assets. At June 30, 2014 and December 31, 2013, the fair value of the notes receivable, including accrued interest, was $26,190 and $53,482, respectively. The fair values of our notes receivable were determined by discounting the future cash flows using the current rates at which similar loans would be made to other borrowers based on similar remaining maturities. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair values of our notes receivable was primarily based upon Level 3 inputs. |
Impairment Charges |
The impairment charges of $1,605 recorded during the three and six months ended June 30, 2013, which are included in discontinued operations, were due to marketing certain properties for sale and our assessment of the likelihood and timing of a potential sale transaction. |
The following table presents information about our real estate assets that were measured at fair value on a non-recurring basis and for which impairment charges were recorded during the six months ended June 30, 2013. The table indicates the fair value hierarchy of the valuation techniques we utilized to determine fair value. |
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| Fair Value Measurements on a Non-Recurring Basis Using: | | |
Description | At June 30, 2013 | | Quoted Prices in | | Significant Other | | Unobservable | | Total |
Active Markets for | Observable Inputs | Inputs | Impairment for the Six Months Ended |
Identical Assets | (Level 2) | (Level 3) | |
(Level 1) | | | |
Sold Operating Properties | $ | 6,993 | | | — | | | — | | | $ | 6,993 | | | $ | (1,605 | ) |
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The following table presents quantitative information about the Level 3 fair value measurements at June 30, 2013. |
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Quantitative Information about Level 3 Fair Value Measurements: | | | | | | | |
Description | | Fair Value | | Valuation Technique | | Unobservable Inputs | | Range | | | | | | | |
Four industrial properties comprising approximately 0.3 million square feet of GLA | | $ | 6,993 | | | Contracted Price | | (A) | | N/A | | | | | | | |
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(A) | The fair value for the properties was based upon the value of a third party purchase contract or letter of intent, which was subject to our corroboration for reasonableness. | | | | | | | | | | | | | | | | |