Rental Properties

The following table summarizes the carrying amounts of rental properties as of December 31, 2017 and 2016 (in thousands):



	2017			2016
Buildings and improvements	$	4,123,356		$	3,272,865
Furniture, fixtures & equipment	87,630			40,684
Land	1,108,805			917,748
Leasehold interests	25,774			—
	5,345,565			4,231,297
Accumulated depreciation	(741,334		)	(635,535		)
Total	$	4,604,231		$	3,595,762

Depreciation expense on rental properties was $129.1 million, $103.9 million and $85.9 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Acquisitions

On April 6, 2017, the Company completed a transaction with CNL Lifestyle Properties Inc. (CNL Lifestyle) and funds affiliated with Och-Ziff Real Estate (OZRE). The Company acquired the Northstar California Resort, 15 attraction properties (waterparks and amusement parks), five small family entertainment centers and certain related working capital for aggregate consideration valued at $479.8 million, including final purchase price adjustments. Additionally, the Company provided $251.0 million of secured debt financing to OZRE for its purchase of 14 CNL Lifestyle ski properties valued at $374.5 million. Subsequent to the transaction, the Company sold the five family entertainment centers for approximately $6.8 million and one waterpark for approximately $2.5 million. No gain or loss was recognized on these sales.

The secured debt financing with OZRE has an initial term of five years with three 2.5-year options to extend. The note bears interest fixed at 8.5%. The Company received a $3.0 million origination fee upon closing that will be recognized using the effective interest method.

The Company assumed long-term, triple-net leases on the Northstar California Resort and three of the attractions properties and entered into new long-term, triple-net lease agreements on the remaining attractions properties at closing. Additionally, the Company assumed ground lease agreements on nine of the properties.

The Company’s aggregate investment in this transaction was $730.8 million and was funded with $657.5 million of the Company’s common shares, consisting of 8,851,264 newly issued registered common shares valued at $74.28 per share, $61.2 million of cash and assumed working capital liabilities (net of assumed accounts receivable) of $12.1 million. CNL Lifestyle subsequently distributed the common shares to its stockholders on April 20, 2017. The Company's portion of the cash purchase price was funded with borrowings under its unsecured revolving credit facility.

This transaction was previously announced as a business combination and, accordingly, related expenses were recognized as transaction costs through December 31, 2016. In connection with the adoption of ASU No. 2017-01 on January 1, 2017, this transaction was determined to be an asset acquisition. As such, transaction costs related to this asset acquisition incurred in 2017 have been capitalized.

The aggregate investment of $730.8 million in this transaction was recorded as follows (in thousands):



	April 6, 2017
Rental properties, net	$	481,006
Mortgage notes and related accrued interest receivable	251,038
Tradenames (included in other assets)	6,355
Below market leases (included in accounts payable and accrued liabilities)	(7,611		)
Total investment	$	730,788

In addition, during the year ended December 31, 2017, the Company completed the acquisition of six megaplex theatres for approximately $154.1 million, six other recreation facilities for approximately $62.7 million and seven early education centers and two public charter schools for approximately $38.5 million.

During the year ended December 31, 2016, the Company completed the acquisition of eight megaplex theatres and a family entertainment center for approximately $148.4 million, four early education centers and one private school for approximately $16.5 million.

Dispositions

During the year ended December 31, 2017, the Company completed the sale of four entertainment properties for net proceeds totaling $72.4 million. In connection with these sales, the Company recognized a gain on sale of $19.4 million.

During the year ended December 31, 2017, pursuant to tenant purchase options, the Company completed the sale of eight public charter schools located in Colorado, Arizona and Utah for net proceeds totaling $97.3 million. In connection with these sales, the Company recognized a gain on sale of $20.7 million. Additionally, the Company completed the sale of three other education facilities for net proceeds of $10.5 million. In connection with these sales, the Company recognized a gain on sale of $1.8 million.

During the year ended December 31, 2016, pursuant to tenant purchase options, the Company completed the sale of two public charter schools located in Colorado for net proceeds totaling $16.6 million and recognized gains on sale totaling $2.8 million. In addition, during the year ended December 31, 2016, the Company completed the sale of three retail parcels located in Texas for total net proceeds of $5.3 million and recognized gains on sale totaling $2.5 million. The Company also completed the sale of a land parcel at Resorts World Catskills for net proceeds of $1.5 million and no gain or loss was recognized. The results of operations of these properties have not been classified within discontinued operations.