2.Real Estate Assets

Real estate assets, net consist of:

	Estimated Useful Lives	May 31, 2015			Nov. 30, 2014
Land		$	17,676		$	17,955
Land improvements	10 to 30 years	14,500			18,527
Buildings and improvements	10 to 40 years	136,556			135,857
Tenant improvements	Shorter of useful life or terms of related lease	17,804			14,820
Machinery and equipment	3 to 20 years	7,622			11,810
Construction in progress		14,418			3,829
Development costs		6,999			6,486

		215,575			209,284
Accumulated depreciation		(69,146		)	(74,762		)

		$	146,429		$	134,522

During the 2015 second quarter, land, land improvements, buildings and improvements and machinery and equipment of the Florida farm previously used by Imperial were reclassified into real estate assets held for sale as a result of the tenant leasing the Florida farm notifying Griffin of its intent to purchase the Florida farm under the purchase option in its lease (see below).

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, 2015		May 31, 2014		May 31, 2015		May 31, 2014

Depreciation expense	$	1,596	$	1,374	$	3,146	$	2,798


Capitalized interest	$	204	$	251	$	367	$	375

In the 2013 fourth quarter, Griffin 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 253 acre parcel of undeveloped land that straddles the town line between Windsor and Bloomfield, Connecticut. Under the terms of the Windsor Land Sale, Griffin and the buyer are each constructing roadways connecting the land parcel sold with existing town roads. The roads being built will become new town roads, providing public access to the remaining acreage in Griffin’s land parcel. As a result of Griffin’s continuing involvement with the land sold, the Windsor Land Sale is being accounted for under the percentage of completion method. Accordingly, the revenue and pretax gain on the sale are being recognized on a pro rata basis in a ratio equal to the percentage of the total costs incurred to the total anticipated costs of sale, including costs of the required roadwork. Costs included in determining the percentage of completion include the cost of the land sold, allocated master planning costs and the cost of road construction. 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. 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, 2015, approximately 76% 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, 2015, approximately 76% 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 2015 second quarter and 2015 six month period include revenue of $245 and $1,071, respectively, and a pretax gain of $127 and $749, respectively, from the Windsor Land Sale. 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. As of May 31, 2015, Griffin has recognized total revenue of $6,844 and a total pretax gain of $5,097 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 in the third and fourth quarters of fiscal 2015. Deferred revenue on Griffin’s consolidated balance sheet as of May 31, 2015, includes $2,124 related to the Windsor Land Sale that will be recognized as the remaining costs are incurred. Including the pretax gain on sale recognized in the 2015 six month period, fiscal 2014 and fiscal 2013, the total pretax gain on the Windsor Land Sale is expected to be approximately $6,678 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 being constructed, increases or decreases in future costs as compared with current estimated amounts would reduce or increase the gain recognized in future periods.

Real estate assets held for sale, net consist of:

	May 31, 2015			Nov. 30, 2014
Land	$	565		$	286
Land improvements	4,089			—
Building and improvements	1,207			—
Machinery and equipment	4,188			—
Development costs	9,677			9,657

	19,726			9,943
Accumulated depreciation	(8,312		)	—

	$	11,414		$	9,943

Included in real estate assets held for sale, net as of May 31, 2015 are land, land improvements, buildings and improvements and machinery and equipment with a net book value of $1,451 reflecting the reclassification of the Florida farm assets from real estate assets, net in the 2015 second quarter. The Florida farm had been used by Imperial prior to being shut down in fiscal 2008 and has been leased to a private company grower of landscape nursery products since fiscal 2009. In the 2015 second quarter, the tenant that leases the Florida farm gave notice of its intent to exercise the purchase option for the Florida farm under the terms of its lease. The purchase price is approximately $4,100 and the sale is expected to close by the end of the fiscal 2015 third quarter. On June 1, 2015, Griffin received a deposit of $400 as required under the terms of the lease agreement. There is no guarantee that this transaction will be completed based on its current terms, or at all.