Real Estate

9 Months Ended

Sep. 30, 2012

Real Estate

3. Real Estate

Investments in real estate properties are presented at cost, and consist of the following (in thousands):

	September 30,		December 31,
	2012		2011
Industrial operating properties (1):
Improved land	$	5,501,866	$	4,813,145
Buildings and improvements		17,802,380		16,739,403
Development portfolio, including cost of land (2)		774,821		860,531
Land (3)		1,924,626		1,984,233
Other real estate investments (4)		457,373		390,225
Total investments in real estate properties		26,461,066		24,787,537
Less accumulated depreciation		2,389,214		2,157,907
Net investments in properties	$	24,071,852	$	22,629,630

(1) At September 30, 2012 and December 31, 2011, we had 1,898 and 1,797 industrial properties consisting of 320.3 million square feet and 291.1 million square feet, respectively. Included at September 30, 2012 were 177 properties totaling $2.0 billion that were acquired in connection with the Q1 Venture Acquisitions.

(2) At September 30, 2012, the development portfolio consisted of 35 properties aggregating 13.0 million square feet. At December 31, 2011, we had 30 properties aggregating 9.5 million square feet in the development portfolio. Our total expected investment upon completion of the properties currently in the development portfolio at September 30, 2012 was $1.3 billion, including land, development and leasing costs.

(3) Land consisted of 10,208 acres and 10,723 acres at September 30, 2012 and December 31, 2011, respectively, and included land parcels that we may develop or sell depending on market conditions and other factors.

In March 2012, we recorded an impairment charge of $16.1 million related to the land received in 2011 in exchange for a note receivable. This impairment was recorded in Impairment of Other Assets in our Consolidated Financial Statements. During the nine months ended September 30, 2012, we recorded impairment charges of $9.8 million related to certain land parcels for which our intent is to sell and therefore, we wrote down to estimated fair value. The impairment was recorded in Impairment of Real Estate Properties in our Consolidated Financial Statements.

(4) Included in other investments are: (i) certain non-industrial real estate; (ii) our corporate office buildings; (iii) land ground leased to third parties; (iv) certain infrastructure costs related to projects we are developing on behalf of others; (v) costs related to future development projects, including purchase options on land; (vi) restricted funds that are held in escrow pending the completion of tax-deferred exchange transactions involving operating properties; and (vii) earnest money deposits associated with potential acquisitions.

At September 30, 2012, excluding our assets held for sale, we owned real estate assets on a consolidated basis in the Americas (Canada, Mexico and the United States), Europe (Austria, Belgium, the Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Romania, Slovakia, Spain, Sweden and the United Kingdom) and Asia (China, Japan and Singapore).

During the nine months ended September 30, 2012, we acquired ten operating buildings aggregating 1.3 million square feet for $60.4 million and 350 acres of land for a total of $112.2 million.

During 2012, we contributed one property aggregating 0.1 million square feet to Europe Logistics Venture I and one property aggregating 0.1 million square feet to Prologis European Properties Fund II.

See Note 6 for further discussion of properties classified as held for sale and properties we sold to third parties that are reported in discontinued operations.