4. Real Estate Assets

Real estate assets consist of:

	Estimated Useful Lives	May 31, 2014			November 30, 2013
Land		$	18,224		$	17,507
Land improvements	10 to 30 years	17,090			15,529
Buildings and improvements	10 to 40 years	123,711			122,057
Tenant improvements	Shorter of useful life or terms of related lease	16,296			16,126
Machinery and equipment	3 to 20 years	11,810			4,188
Development costs		26,739			16,861
		213,870			192,268
Accumulated depreciation		(73,330		)	(61,078		)
		$	140,540		$	131,190

Included in real estate assets, net as of May 31, 2014 was $1,547 reflecting the net book value of Imperial’s Connecticut farm assets that were leased to Monrovia effective January 8, 2014 (see Notes 1, 2 and 10). Prior to that date, these assets were reported as part of property and equipment. The assets reclassified from property and equipment to real estate assets had a cost of $11,485, net of accumulated depreciation of $9,850 at the time of the reclassification.

Total depreciation expense and capitalized interest related to real estate assets, net were as follows:

	For the Three Months Ended,				For the Six Months Ended,
	May 31, 2014		June 1, 2013		May 31, 2014		June 1, 2013

Depreciation expense	$	1,374	$	1,368	$	2,798	$	2,748

Capitalized interest	$	251	$	—	$	375	$	—

In the 2013 fourth quarter, Griffin Land completed the sale of approximately 90 acres of undeveloped land for approximately $9,000 in cash, before transaction costs (the “Windsor Land Sale”). The land sold is located in Windsor, Connecticut and is part of an approximately 268 acre parcel of undeveloped land that straddles the town line between Windsor and Bloomfield, Connecticut. Under the terms of the Windsor Land Sale, Griffin Land and the buyer will each construct roadways connecting the land parcel sold with existing town roads. The roads to be built will become new town roads, thereby providing public access to the remaining acreage in Griffin Land’s land parcel. As a result of Griffin Land’s continuing involvement with the land sold, the Windsor Land Sale is being accounted for under the percentage of completion method, whereby the revenue and gain on the sale are being recognized as the total costs related to the property sold are incurred. At the closing of the Windsor Land Sale, cash proceeds of $8,860 were placed in escrow for the potential purchase of a replacement property in a like-kind exchange under Section 1031 of the Internal Revenue Code of 1986, as amended, which was reflected as Proceeds Held in Escrow on Griffin’s consolidated balance sheet as of November 30, 2013. The proceeds held in escrow were returned to Griffin in the 2014 second quarter as a replacement property was not acquired.

As of May 31, 2014, approximately 34% of the total costs related to the Windsor Land Sale have been incurred; therefore, from the date of the Windsor Land Sale through May 31, 2014, approximately 34% of the total revenue and pretax gain on the sale have been recognized in Griffin’s consolidated statements of operations. Griffin’s consolidated statements of operations for the 2014 second quarter and 2014 six month period include revenue of $277 and $370, respectively, and a pretax gain of $207 and $276, respectively, from the Windsor Land Sale. The balance of the revenue and pretax gain on sale will be recognized when the remaining costs are incurred, which is expected to take place mostly in the third and fourth quarters of fiscal 2014. Included on Griffin’s consolidated balance sheet as of May 31, 2014, is deferred revenue of $5,930 that will be recognized as the remaining costs are incurred. Including the pretax gain on sale of $1,990 recognized in fiscal 2013 and $276 recognized in the 2014 six month period, the total gain on the Windsor Land Sale is expected to be approximately $6,688 after all revenue is recognized and all costs are incurred. While management has used its best estimates, based on industry knowledge and experience, in projecting the total costs of the required roadways, increases or decreases in future costs as compared with current estimated amounts would reduce or increase the gain recognized in future periods (see Note 10).

Real estate assets held for sale consist of:

	May 31, 2014		November 30, 2013
Land	$	30	$	30
Development costs	1,074		1,074
	$	1,104	$	1,104