Property

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Real Estate Disclosure [Text Block]

PROPERTY

The primary reason we make acquisitions of real estate investments in the retail, office, industrial and apartment property sectors is to invest capital in a diversified portfolio of real estate. The consolidated properties held by us as of December 31, 2012 were as follows:

Property	Sector	Square Feet (Unaudited)	Location	Ownership %		Acquisition Date	Acquisition Price
Monument IV at Worldgate	Office	228,000	Herndon, VA	100	%	8/27/2004	$	59,608
111 Sutter Street (1)	Office	286,000	San Francisco, CA	100	%	3/29/2005	100,779
105 Kendall Park Lane	Industrial	409,000	Atlanta, GA	100	%	6/30/2005	18,781
Dignity Health Office Portfolio (2)	Office	755,000	CA and AZ	100	%	12/21/2005	136,761
Stirling Slidell Shopping Centre	Retail	139,000	Slidell, LA	100	%	12/14/2006	23,367
4001 North Norfleet Road	Industrial	702,000	Kansas City, MO	100	%	2/27/2007	37,579
Station Nine Apartments	Apartment	312,000	Durham, NC	100	%	4/16/2007	56,417
4 Research Park Drive	Office	60,000	St. Charles, MO	100	%	6/13/2007	11,330
36 Research Park Drive	Office	81,000	St. Charles, MO	100	%	6/13/2007	17,232
The District at Howell Mill	Retail	306,000	Atlanta, GA	87.85	%	6/15/2007	78,661
Canyon Plaza	Office	199,000	San Diego, CA	100	%	6/26/2007	54,973
Railway Street Corporate Centre	Office	137,000	Calgary, Canada	100	%	8/30/2007	42,614
Cabana Beach San Marcos (3)	Apartment	278,000	San Marcos, TX	78	%	11/21/2007	29,375
Cabana Beach Gainesville (3)	Apartment	545,000	Gainesville, FL	78	%	11/21/2007	74,277
Campus Lodge Athens (3)	Apartment	229,000	Athens, GA	78	%	11/21/2007	20,980
Campus Lodge Columbia (3)	Apartment	256,000	Columbia, MO	78	%	11/21/2007	24,852
The Edge at Lafayette (3)	Apartment	207,000	Lafayette, LA	78	%	1/15/2008	26,870
Campus Lodge Tampa (3)	Apartment	431,000	Tampa, FL	78	%	2/29/2008	46,787

(1) On March 29, 2005, we acquired an 80% interest in the property. On December 4, 2012, we acquired the remaining 20% interest.

(2) Consists of a portfolio of leasehold interests in 15 medical office buildings located throughout Southern California and the greater Phoenix metropolitan area. The buildings are all subject to ground leases expiring in 2078.

(3) The other owner, owning a 22% interest, is an investment fund advised by our Advisor and in which the parent company of our Advisor owns a noncontrolling interest.

On December 4, 2012, we acquired the remaining 20% interest in 111 Sutter Street, a 286,000 square foot, multi-tenant office building in San Francisco, California. We had previously owned a majority, but non-controlling, interest in 111 Sutter Street from March 29, 2005 through December 4, 2012. The purchase price for the remaining interest was $22,000. The seller financed $12,000 of the purchase price in the form of a note payable due September 30, 2013. We funded the balance of the acquisition using cash on hand. 111 Sutter Street was previously accounted for as an investment in an unconsolidated real estate affiliate as all decisions required unanimous approval. Effective December 5, 2012, we have consolidated the balance sheet and operations of 111 Sutter Street, which includes the existing $54,130 mortgage loan at an interest rate of 5.58%, maturing in July 2015. As a result of the consolidation, we recorded a gain on consolidation of real estate affiliate of $34,852 within our Consolidated Statements of Operations and Comprehensive Income (Loss).

Fair value for our investment in 111 Sutter Street was determined through the use of an income approach and was measured using Level 3 inputs. The income approach estimates an income stream for the property and discounts this income plus a reversion (presumed sale) into a present value at a risk adjusted rate. Rent growth assumptions utilized in this approach are derived from market transactions as well as other financial and industry data. The terminal cap rate and discount rate are significant inputs to this valuation. The fair value measurements determined during the year included rent growth assumptions ranging between 3% and 7%, terminal cap rate of 6.25% and discount rate of 7.75%. Changes in these inputs could result in a significant change in the valuation of our original joint venture investment and a change in the gain on consolidation of real estate affiliate during the period. We allocated the purchase price of our 2012 acquisition in accordance with authoritative guidance as follows:

	111 Sutter Street
Land	$	39,919
Building	72,712
In-place lease value (acquired intangible assets)	12,772
Above-market leases value (acquired intangible assets)	729
Below-market leases value (acquired intangible liabilities)	(5,289		)
In-place debt premium (mortgage notes payable)	(3,868		)
Assumption of mortgage note payable	(54,130		)
	$	62,845
Amortization period for intangible assets and liabilities	3 years, 1 month
Amortization period for debt premium	2 years, 7 months

Unaudited Proforma Information

If the acquisition had occurred on January 1, 2011, the Company's consolidated revenues and net loss for the year ended December 31, 2012 would have been $86,471 and $1,591, respectively, and the Company's consolidated revenues and net income for the year ended December 31, 2011 would have been $89,229 and $10,203, respectively.

Impairment of Investments in Real Estate

 In accordance with authoritative guidance for impairment of long-lived assets we recorded the following impairments of investments in real estate during the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31, 2012		Year Ended December 31, 2011		Year Ended December 31, 2010
Continuing Operations
105 Kendall Park Lane	$	—	$	—	$	(1,718	)
4001 North Norfleet Road	—		—		74
Net recovery of impairment of real estate classified as continuing operations	$	—	$	—	$	(1,644	)
Discontinued Operations
Havertys Furniture	$	—	$	—	$	(2,148	)
25850 S. Ridgeland	—		—		586
Metropolitan Park North	—		—		28,781
Georgia Door Sales Distribution Center	913		—		64
Marketplace at Northglenn	—		14,934		—
Net provision for impairment of real estate classified as discontinued operations	$	913	$	14,934	$	27,283

The valuation of these assets is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset as well as the income capitalization approach considering prevailing market capitalization and discount rates. We review each investment based on the highest and best use of the investment and market participation assumptions. The significant assumptions included the capitalization rate used in the income capitalization valuation and projected property net operating income and net cash flows. Additionally, the valuation considered bid and ask prices for similar properties. We have determined that the significant inputs used to value the impaired assets fall within Level 3, see below.

For the year ended December 31, 2010

At March 31, 2010, we reevaluated the assets previously impaired in December 2009 for further impairment and determined that 25850 S. Ridgeland, Georgia Door Sales Distribution Center and 4001 North Norfleet Road were further impaired. As such, we recognized additional impairment charges. The impairment stemmed from continuing deterioration of real estate market fundamentals. Upon our reevaluation of 105 Kendall Park Lane and Havertys Furniture, we determined that the fair values less costs to sell increased since our initial evaluation. As such, we recorded a recovery of previously recorded impairment.

On April 15, 2010, we removed Georgia Door Sales Distribution Center, 105 Kendall Park Lane and 4001 North Norfleet Road from held for sale and placed them into held for use status at their fair value on that date (which was less than reinstating these investments at cost less depreciation catch up). Upon recording the properties at the fair value on April 15, 2010, we recorded a recovery of previously recorded provision for impairment.

In December 2010, we determined that Metropolitan Park North was impaired due to the carrying value of the investment exceeding the undiscounted cash flows over our expected hold period. As such, we recognized an impairment charge which represents the difference between the fair value and the carrying value of the property. The impairment stemmed from the near term debt maturity, the unwillingness of the lender to negotiate a material loan modification and the main tenant of the building not renewing their lease.

For the year ended December 31, 2011

As of June 30, 2011, we determined that Marketplace at Northglenn was impaired due to the carrying value of the investment exceeding the undiscounted cash flows over our expected hold period. As such, we recognized an impairment charge which represents the difference between the fair value and the carrying value of the property. The impairment stemmed from decreasing our expected hold period of the property due to the property’s cash flows being forecasted to no longer cover debt service as a result of Border’s bankruptcy and lower rental rates on a newly signed lease renewal that occurred during the three months ending June 30, 2011.

For the year ended December 31, 2012

On March 16, 2012, Georgia Door Sales Distribution Center, a 254,000 square foot industrial property located in Austell, Georgia, was classified as held for sale and evaluated for impairment as of that date. We determined the carrying value of the investment exceeded the fair value less cost to sell. As such, we recognized impairment charges of approximately $913.

Note 3A -Discontinued Operations

On March 23, 2012, we relinquished our ownership of Metropolitan Park North, a 187,000 square foot office building located in Seattle, Washington, through a deed in lieu of foreclosure with the lender.

On March 16, 2012, Georgia Door Sales Distribution Center, a 254,000 square foot industrial property located in Austell, Georgia, was classified as held for sale.

On April 15, 2010, we sold Havertys Furniture, an 808,000 square foot industrial property located in Braselton, Georgia for $35,000 resulting in a gain of $113. On the same day, we also sold 25850 S. Ridgeland, a 719,000 square foot industrial property located in Monee, Illinois, for $19,060 resulting in a gain of $709. The results of operations and gain on sale of the properties are reported as discontinued operations for all periods presented.

The following table summarizes income (loss) from discontinued operations for those properties described in Note 3A for the years ended December 31, 2011 and 2010:

	Year Ended December 31, 2011			Year Ended December 31, 2010
Total revenue	$	7,848		$	9,785
Real estate taxes	(624		)	(1,065		)
Property operating	(1,222		)	(1,343		)
Provision for doubtful accounts	(19		)	—
General and administrative	(137		)	(156		)
Net provision for impairment	—			(27,283		)
Depreciation and amortization	(1,917		)	(3,163		)
Loss on extinguishment of debt	—			(711		)
Interest expense	(3,392		)	(4,286		)
Loss from discontinued operations	$	537		$	(28,222	)

Note 3B -Discontinued Operations

On March 16, 2012, in accordance with the authoritative guidance for impairment of long-lived assets held for sale, we determined the carrying value of Georgia Door Sales Distribution Center exceeded the fair value less cost to sell. As such, we recognized impairment charges of approximately $913 . On April 20, 2012, we sold the property for $5,150 resulting in a loss of $117. The results of operations and loss on sale of the property are reported as discontinued operations for all periods presented.

On March 23, 2012, upon our relinquishment of Metropolitan Park North, we were relieved of approximately $56,513 of mortgage obligations plus accrued default interest associated with the mortgage loan. A non-cash accounting gain of $6,018 was recognized on the transfer of property representing the difference between the fair value and the net book value of the property as of the date of transfer. Upon extinguishment of the mortgage debt obligation, a $5,773 non-cash accounting gain was recognized representing the difference between the book value of the debt, interest payable and other obligations extinguished over the fair value of the property and other assets transferred as of the transfer date. The results of operations and gain on transfer of the property are reported as discontinued operations for all periods presented.

On July 11, 2012, we relinquished our ownership of Marketplace at Northglenn, a 439,000 square foot retail center located in Northglenn, Colorado, via a foreclosure proceeding. The Company has been relieved of approximately $66,480 of mortgage obligations plus accrued default interest associated with the mortgage loan. A non-cash accounting loss of $6 was recognized on the transfer of property representing the differences between fair value and the net book value of the property as of the date of the transfer. Upon extinguishment of the mortgage debt obligation, a $2,908 non-cash accounting gain was recognized representing the difference between the book value of the debt, interest payable and other obligations extinguished over the fair value of the property and other assets transferred as of the transfer date. The results of operations and gain on transfer of the property are reported as discontinued operations for all periods presented.

The following table summarizes the loss from discontinued operations for Marketplace at Northglenn for the years ended December 31, 2012, 2011, and 2010 as well as the loss from discontinued operations of Metropolitan Park North and Georgia Door Sales Distribution Center for the year ended December 31, 2012:

	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Total revenue	$	5,080		$	7,587		$	7,523
Real estate taxes	(813		)	(1,231		)	(1,116		)
Property operating	(699		)	(1,248		)	(1,221		)
Provision for doubtful accounts	(31		)	(272		)	(9		)
General and administrative	(106		)	(69		)	(36		)
Net provision for impairment	(913		)	(14,934		)	—
Depreciation and amortization	(1,125		)	(2,592		)	(2,896		)
Interest expense	(4,441		)	(4,128		)	(3,544		)
Loss from discontinued operations	$	(3,048	)	$	(16,887	)	$	(1,299	)