Investments In Real Estate

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Investments In Real Estate

Investments in Real Estate

We acquired no real estate properties during the three months ended March 31, 2015.

Dispositions

We have identified certain non-core investment properties we intend to sell as part of our capital recycling strategy. Our capital recycling program is designed to identify non-strategic and underperforming assets that can be sold to generate proceeds that will support the funding of our core investment activity. We expect our capital recycling initiative will likewise have a meaningfully positive impact on overall return on invested capital. In addition, our capital recycling program does not represent a strategic shift, as we are not entirely exiting regions or property types. During this process, we are evaluating the carrying value of certain investment properties identified for potential sale to ensure the carrying value is recoverable in light of a potentially shorter holding period. As a result of our evaluation, during the year ended December 31, 2014, we recognized approximately $126.5 million of impairment losses on five properties located in the Midwest, Northeast and West regions. The fair value of the five properties were primarily based on discounted cash flow analysis, and in certain cases, we supplemented the analysis by obtaining broker opinions of value. As of March 31, 2015, these properties do not yet meet the criteria to be classified as held for sale.

As of December 31, 2014, the Company had taken the necessary actions to conclude that five properties (separate from those referenced above) to be disposed of as part of our capital recycling strategy met the criteria to be classified as held for sale. As of December 31, 2014, these five properties had an aggregate carrying value of $120.5 million within total assets and $5.8 million within total liabilities and are shown as assets held for sale and obligations associated with assets held for sale on the condensed consolidated balance sheet. The five properties are not representative of a significant component of our portfolio, nor does the potential sales represent a significant shift in our strategy. During the three months ended March 31, 2015, two of the properties were sold, with aggregate gross sales proceeds of approximately $45.3 million and we recognized a gain of approximately $17.8 million. As of March 31, 2015, two of the remaining three properties still met the criteria to be classified as held for sale. As of March 31, 2015, these two properties had an aggregate carrying value of $81.7 million within total assets and $3.2 million within total liabilities and are shown as assets held for sale and obligations associated with assets held for sale on the condensed consolidated balance sheet. The Company reclassified one property that was held for sale as of December 31, 2014 back to held for use, and recorded catch-up depreciation expense of approximately $0.3 million associated with this property.

Subsequent to March 31, 2015, the Company has taken the necessary actions to conclude that one additional property to be disposed of met the criteria under authoritative accounting guidance to be classified as held for sale.  As these criteria had not been met as of March 31, 2015, the property is classified as held for use in the accompanying condensed consolidated financial statements.  As of March 31, 2015, the property had an aggregate carrying value of $15.6 million within total assets and $0.3 million within total liabilities.