Discontinued operations

6 Months Ended

Jun. 30, 2011

Discontinued operations

Discontinued operations

10. Discontinued operations

We classify a property as “held for sale” when all of the following criteria for a plan of sale have been met: (1) management, having the authority to approve the action, commits to a plan to sell the property; (2) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (3) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (4) the sale of the property is probable and is expected to be completed within one year; (5) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.  When all of these criteria have been met, the property is classified as “held for sale”; its operations, including any interest expense directly attributable to it, are classified as discontinued operations in our condensed consolidated statements of operations; and amounts for all prior periods presented are reclassified from continuing operations to discontinued operations.  Depreciation of assets ceases upon designation of a property as “held for sale.”

The following is a summary of income from discontinued operations, net, and net assets of discontinued operations (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Total revenue	$	2		$	–		$	2		$	794
Operating expenses	40			17			99			216
Revenue less operating expenses	(38		)	(17		)	(97		)	578
Interest expense	–			–			–			–
Depreciation expense	–			43			–			69
(Loss) income from discontinued operations before gain on sales of real estate	(38		)	(60		)	(97		)	509
Gain on sales of real estate	–			–			–			24
(Loss) income from discontinued operations, net	$	(38	)	$	(60	)	$	(97	)	$	533
	June 30, 2011			December 31, 2010
Properties “held for sale,” net	$	1,859		$	1,859
Other assets	117			90
Total assets	$	1,976		$	1,949
Total liabilities	157			133
Net assets of discontinued operations	$	1,819		$	1,816

Loss from discontinued operations, net, for the three and six months ended June 30, 2011, includes the results of operations of one operating property that was classified as “held for sale” as of June 30, 2011.  Loss from discontinued operations, net, for the three months ended June 30, 2010, includes the results of operations of one property that was classified as “held for sale” as of June 30, 2010.  Income from discontinued operations, net for the six months ended June 30, 2010, includes the results of operations of one property that was classified as “held for sale” as of June 30, 2010, and the results of operations and gain on sale of one operating property that was sold during the first quarter of 2010.  During the six months ended June 30, 2010, we sold one property located in the Seattle market at a price of approximately $11.8 million.