Discontinued Operations

6 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

16. Discontinued Operations

Divestitures

In accordance with ASC 360, Property, Plant & Equipment, we report results of operations from real estate assets that meet the definition of a component of an entity that have been sold, or meet the criteria to be classified as held for sale, as discontinued operations.

Real Estate Held for Sale and Disposed

At June 30, 2014 and December 31, 2013, the Sherburne Commons property has been classified as assets of variable interest entity held for sale and liabilities of variable interest entity held for sale and the results of operations for the variable interest entity held for sale have been presented in discontinued operations on the accompanying consolidated statements of operations for all periods presented (see Note 10).

No real estate investments were disposed of in 2014.

Purchase Options

As of June 30, 2014, the Company has a property with a book value of approximately $8.0 million that is subject to a purchase option that becomes exercisable on September 14, 2014. The option provides the option holder with the right to purchase the property at increasing exercise price intervals based on elapsed time. The option expires August 13, 2022.

The following is a summary of the components of (loss) income from discontinued operations for the three months and six months ended June 30, 2014 and 2013:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Rental revenues, tenant reimbursements and other income	$	599,000	$	1,297,000	$	1,153,000	$	2,640,000
Operating expenses and real estate taxes		(670,000)		(1,155,000)		(1,389,000)		(2,238,000)
Depreciation and amortization		—		(149,000)		—		(402,000)
Impairment of real estate		—		(3,368,000)		—		(3,368,000)
Gain on sales of real estate net		—		37,000		—		4,088,000
Income (loss) from discontinued operations	$	(71,000)	$	(3,338,000)	$	(236,000)	$	720,000

FASB ASC 360 requires that assets classified as held for sale be carried at the lesser of their carrying amount or estimated fair value, less estimated selling costs. 

The following table presents balance sheet information for the properties classified as held for sale as of June 30, 2014 and December 31, 2013.

	June 30, 2014		December 31, 2013
Assets of variable interest entity held for sale:
Cash and cash equivalents	$	55,000	$	124,000
Investments in real estate, net		3,905,000		3,905,000
Accounts receivable, inventory and other assets		211,000		270,000
Total assets	$	4,171,000	$	4,299,000
Liabilities of variable interest entity held for sale:
Note payable	$	1,332,000	$	1,332,000
Loan payable		157,000		219,000
Accounts payable and accrued liabilities		606,000		600,000
Intangible lease liabilities, net		145,000		145,000
Interest payable		556,000		473,000
Liabilities of variable interest entity held for sale	$	2,796,000	$	2,769,000