Discontinued Operations and Assets Held for Sale

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Assets Held for Sale

Discontinued Operations and Assets Held for Sale

The following table illustrates the number of sold or held-for-sale properties included in, or excluded from, discontinued operations:

	Held for Sale at March 31, 2014	Sold in 2014	Sold in 2013	Total
Industrial	2	9	6	17
Office	0	0	12	12
Medical Office	1	1	6	8
Retail	0	0	1	1
Total properties included in discontinued operations	3	10	25	38
Properties excluded from discontinued operations	0	1	13	14
Total properties sold or classified as held-for-sale	3	11	38	52

We allocate interest expense to discontinued operations and have included such interest expense in computing income from discontinued operations. Interest expense allocable to discontinued operations includes interest on any secured debt for properties included in discontinued operations and an allocable share of our consolidated unsecured interest expense for unencumbered properties. The allocation of unsecured interest expense to discontinued operations was based upon the gross book value of the unencumbered real estate assets included in discontinued operations as it related to the total gross book value of our unencumbered real estate assets.

The following table illustrates the operations of the buildings reflected in discontinued operations for the three months ended March 31,2014 and 2013, respectively (in thousands):

	Three Months Ended March 31,
	2014			2013
Revenues	$	1,368		$	16,404
Operating expenses	(913		)	(5,986		)
Depreciation and amortization	(205		)	(6,787		)
Operating income	250			3,631
Interest expense	(382		)	(4,260		)
Loss before gain on sales	(132		)	(629		)
Gain on sale of depreciable properties	19,752			8,954
Income from discontinued operations before income taxes	19,620			8,325
Income tax expense	(2,977		)	—
Income from discontinued operations	$	16,643		$	8,325

The income tax expense included in discontinued operations during the three months ended March 31,2014 was triggered by the sale of a property that was partially owned by our taxable REIT subsidiary.

The income tax expense from continuing operations of $2.7 million for the three months ended March 31,2014, as presented in the Consolidated Statements of Operations and Comprehensive Income, was related to the sale of another property that was partially owned by our taxable REIT subsidiary but, due to continuing involvement in managing the property, was not classified as a discontinued operation.

Dividends or distributions on preferred shares or Preferred Units and adjustments for the redemption or repurchase of preferred shares or Preferred Units are allocated entirely to continuing operations for both the General Partner and the Partnership.

Allocation of Noncontrolling Interests - General Partner

The following table illustrates the General Partner's share of the income (loss) attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income or loss between continuing and discontinued operations to the Limited Partner Units, for the three months ended March 31,2014 and 2013, respectively (in thousands):

	Three Months Ended March 31,
	2014		2013
Income from continuing operations attributable to common shareholders	$	2,260	$	19,833
Income from discontinued operations attributable to common shareholders	16,423		8,210
Net income attributable to common shareholders	$	18,683	$	28,043

Allocation of Noncontrolling Interests - Partnership

Substantially all of the income from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders.

Properties Held for Sale

At March 31, 2014, we classified three in-service properties as held-for-sale, which were included in discontinued operations, due to our intention and ability to sell these properties in the second quarter of 2014. The following table illustrates aggregate balance sheet information of these properties at March 31, 2014 (in thousands):

	March 31, 2014
Real estate investment, net	$	29,316
Other assets	5,510
Total assets held-for-sale	$	34,826
Accrued expenses	$	132
Other liabilities	47
Total liabilities held-for-sale	$	179