ACQUISITIONS

The Company did not acquire any properties during the six months ended June 30, 2018.

The Company closed on the following acquisitions during the six months ended June 30, 2017:

Date

Property Name

Metropolitan
Statistical Area (MSA)

Property Type

Square

Footage

Acquisition

Price

January 13, 2017

Main Street Promenade (a)

Chicago

Multi-tenant retail

181,600

88,000

January 25, 2017

Carillon – Fee Interest

Washington, D.C.

Fee interest (b)

—

2,000

February 24, 2017

One Loudoun Downtown –

Phase II

Washington, D.C.

Additional phase of multi-tenant retail (c)

15,900

4,128

April 5, 2017

One Loudoun Downtown –

Phase III

Washington, D.C.

Additional phase of multi-tenant retail (c)

9,800

2,193

May 16, 2017

One Loudoun Downtown –

Phase IV

Washington, D.C.

Development rights (c)

—

3,500

207,300

99,821

(d)


(a)	This property was acquired through two consolidated VIEs and was used to facilitate an Internal Revenue Code Section 1031 tax-deferred exchange (1031 Exchange).

(b)

The wholly-owned multi-tenant retail operating property formerly known as Boulevard at the Capital Centre, which is located in Largo, Maryland, was previously subject to an approximately 70 acre long-term ground lease with a third party. The Company completed a transaction whereby it received the fee interest in approximately 50 acres of the underlying land in exchange for which (i) the Company paid $1,939 and (ii) the term of the ground lease with respect to the remaining approximately 20 acres was shortened to nine months. The Company derecognized building and improvements of $11,347 related to the remaining ground lease, recognized the fair value of land received of $15,200 and recorded a deferred gain of $2,524 as of June 30, 2017, which was recognized during the three months ended December 31, 2017 upon the expiration of the ground lease on approximately 20 acres. The total number of properties in the Company’s portfolio was not affected by this transaction.


(c)	The Company acquired three additional phases, including the development rights for an additional 123 residential units for a total of 408 units, at its One Loudoun Downtown multi-tenant retail operating property, which were accounted for as asset acquisitions. The total number of properties in the Company’s portfolio was not affected by these transactions.


(d)	Acquisition price does not include capitalized closing costs and adjustments totaling $2,334.

The following table summarizes the acquisition date values, before prorations, the Company recorded in conjunction with the acquisitions discussed above:



	Six Months Ended June 30, 2017
Land	$	23,559
Building and other improvements, net	77,748
Acquired lease intangible assets (a)	7,343
Acquired lease intangible liabilities (b)	(5,477		)
Other liabilities	(1,076		)
Net assets acquired	$	102,097


(a)	The weighted average amortization period for acquired lease intangible assets is six years for acquisitions completed during the six months ended June 30, 2017.


(b)	The weighted average amortization period for acquired lease intangible liabilities is 13 years for acquisitions completed during the six months ended June 30, 2017.

The above acquisitions were funded using a combination of available cash on hand, proceeds from dispositions and proceeds from the Company’s unsecured revolving line of credit. All of the acquisitions completed during 2017 were considered asset acquisitions and, as such, transaction costs were capitalized upon closing.

Variable Interest Entities

During the six months ended June 30, 2017, the Company entered into an agreement with a qualified intermediary related to a 1031 Exchange. The Company loaned $87,452 to the VIEs to acquire Main Street Promenade on January 13, 2017. The 1031 Exchange was completed during the year ended December 31, 2017 and, in accordance with applicable provisions of the Code, within 180 days after the acquisition date of the property. At the completion of the 1031 Exchange, the sole membership interests of the VIEs were assigned to the Company in satisfaction of the outstanding loan, resulting in the entities being wholly owned by the Company and no longer considered VIEs.

Prior to the completion of the 1031 Exchange, the Company was deemed to be the primary beneficiary of each VIE as it had the ability to direct the activities of the VIEs that most significantly impact their economic performance and had all of the risks and rewards of ownership. Accordingly, the Company consolidated the VIEs. No value or income was attributed to the noncontrolling interest. The assets of the VIEs consisted of the investment property, Main Street Promenade, which was operated by the Company.