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Net Investments in Properties
 3 Months Ended
Mar. 31, 2014
Real Estate [Abstract]  
Net Investments in Properties
Net Investments in Properties
 
Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, and real estate under construction, is summarized as follows (in thousands):
 
March 31, 2014
 
December 31, 2013
Land
$
1,108,314

 
$
534,697

Buildings
3,368,684

 
1,972,107

Real estate under construction
10,930

 
9,521

Less: Accumulated depreciation
(191,666
)
 
(168,076
)
 
$
4,296,262

 
$
2,348,249


 
As discussed in Note 3, we acquired 226 properties subject to existing operating leases in the CPA®:16 Merger, which increased the carrying value of our real estate by $2.0 billion during the three months ended March 31, 2014. In connection with restructuring one of the leases, we reclassified properties with an aggregate carrying value of $6.2 million from Net investments in direct financing leases to Real estate during the three months ended March 31, 2014 (Note 6).

Acquisitions of Real Estate

During the three months ended March 31, 2014, we entered into a domestic investment for an office building, which was deemed to be a business combination because we assumed the existing lease on the property, at a total cost of $43.1 million, including land of $5.3 million, building of $27.6 million and net lease intangibles of $10.2 million (Note 9). In connection with this transaction, we expensed acquisition-related costs of $0.1 million, which are included in Merger and acquisition costs in the consolidated financial statements.

Real Estate Held for Sale

Below is a summary of our properties held for sale (in thousands):

 
March 31, 2014
 
December 31, 2013
Real estate, net
$
61,274

 
$
62,466

Above-market rent intangible assets, net
21,394

 
13,872

In-Place lease intangible assets, net
14,041

 
12,293

Below-market rent and other intangible liabilities, net
(1,500
)
 
(1,808
)
Assets held for sale
$
95,209

 
$
86,823

 
 
 
 
Non-recourse debt
$
(9,279
)
 
$
—

Liabilities associated with assets held for sale (a)
$
(9,279
)
 
$
—

___________
(a)
Amount is included in Non-recourse debt on the consolidated balance sheet.

At December 31, 2013, we had nine properties classified as Assets held for sale, six of which were sold during the three months ended March 31, 2014 and three remain as Assets held for sale at March 31, 2014. In connection with the CPA®:16 Merger in January 2014, we acquired nine properties that were classified as Assets held for sale with a total fair value of $133.0 million, three of which were sold during the three months ended March 31, 2014 and six remain as Assets held for sale at March 31, 2014. The results of operations for these properties are reflected in the consolidated financial statements as discontinued operations (Note 16).

During the three months ended March 31, 2014, we also reclassified one property with a carrying value of $1.3 million to Assets held for sale. The result of operations for this property are included within continuing operations in the consolidated financial statements (Note 16).

Operating Real Estate
 
Operating real estate, which consists of our investments in two hotels acquired in the CPA®:16 Merger and two self-storage properties, at cost, is summarized as follows (in thousands): 
 
March 31, 2014
 
December 31, 2013
Land
$
7,027

 
$
1,097

Buildings
77,467

 
4,927

Less: Accumulated depreciation
(1,704
)
 
(882
)
 
$
82,790

 
$
5,142