6. Real Estate and Real Estate-Related Investments

As of December 31, 2017, we consolidated seven real estate assets. The following table presents certain information about our consolidated investments as of December 31, 2017:

Property Name	Description	Location	Date Acquired	Ownership Interest
Gardens Medical Pavilion	Medical office building	Palm Beach Gardens, Florida	October 20, 2010	81.8	%
River Club and the Townhomes at River Club	Student housing	Athens, Georgia	April 25, 2011	85	%
Lakes of Margate	Multifamily	Margate, Florida	October 19, 2011	92.5	%
Arbors Harbor Town	Multifamily	Memphis, Tennessee	December 20, 2011	94	%
22 Exchange	Student housing and Retail	Akron, Ohio	April 16, 2013	90	%
Parkside Apartments (“Parkside”)	Multifamily	Sugar Land, Texas	August 8, 2013	90	%
Flats at Fishers Fishers	Multifamily	Fishers, Indiana	November 30, 2017	100	%

Real Estate Asset Acquisitions and Dispositions

Babcock Self Storage

On January 8, 2015, we sold Babcock Self Storage (“Babcock”) for a contractual sales price of approximately $5.4 million. We recorded a gain on sale of real estate of $2.0 million and loss on early extinguishment of debt of less than $0.1 million, which was composed of the write-off of deferred financing fees and an early termination fee. A portion of the proceeds from the sale were used to pay off in full the existing indebtedness of approximately $2.1 million associated with the storage facility.

Alte Jakobstraße

On February 21, 2015, we sold AJS, which is located in Berlin, Germany, for a contractual sales price of approximately €12.4 million (approximately $14.1 million). We recorded a gain on sale of real estate of approximately $3.3 million, which is net of a CTA charge of approximately $0.6 million. We recognized a loss on early extinguishment of debt of less than $0.1 million, which was composed of the write-off of deferred financing fees and an early termination fee. A portion of the proceeds from the sale were used to fully satisfy the existing indebtedness associated with the property of approximately €5.7 million (approximately $6.5 million). We recorded a provision for income tax of approximately $1.7 million during 2015 as a result of foreign income tax related to the sale. AJS was classified as held for sale on our consolidated balance sheet at December 31, 2014. Additionally, in 2016, we recorded a $0.1 million loss related to the final settlement of certain fees associated with our 2015 disposal of AJS.

Holstenplatz

On September 1, 2015, we sold Holstenplatz, which is located in Hamburg, Germany, for a contractual sales price of approximately €16.4 million (approximately $18.4 million). We paid off the balance of the Holstenplatz debt of $8.1 million on its maturity date of April 30, 2015. We recorded a gain on sale of real estate of approximately $8.6 million, which includes a CTA credit of approximately $0.4 million. We recorded a provision for income tax of approximately $1.0 million as a result of foreign income tax related to the sale.

The foreign income tax for our AJS and Holstenplatz sales were calculated on gains recognized at the exchange rate in effect on the sale dates of February 21, 2015 and September 1, 2015, respectively, and were calculated using current tax rates. All U.S. dollar amounts related to the AJS and Holstenplatz sales were based on the exchange rate in effect on their respective sale dates.

Wimberly at Deerwood

On September 9, 2015, we sold Wimberly at Deerwood (“Wimberly”), a 322-unit multifamily community in Jacksonville, Florida, for a contractual sales price of approximately $43.5 million. We recorded a gain on sale of real estate of $8.9 million and loss on early extinguishment of debt of $0.6 million, which was composed of the write-off of deferred financing fees of $0.3 million and an early termination fee of $0.3 million. A portion of the proceeds from the sale of the asset were used to pay off in full the existing indebtedness of approximately $26.4 million secured by the property.

Lakewood Flats

On August 16, 2016, we sold Lakewood Flats for a contractual sales price of approximately $68.8 million, resulting in a gain on sale of real estate of $11.5 million and a deferred gain of approximately $1.2 million. The deferred gain represents the amount of monies held in escrow to be reimbursed upon completion of the property’s outstanding insurance claim. We recorded a loss on early extinguishment of debt of $0.5 million, which was composed of the write-off of deferred financing fees of $0.4 million and an early termination fee of $0.1 million. A portion of the proceeds from the sale were used to pay off in full the existing indebtedness of approximately $33.5 million secured by the property.

Courtyard Kauai Coconut Beach Hotel

On August 15, 2017, we sold the Courtyard Kauai Coconut Beach Hotel, a 311-room hotel located in Kapaa, Hawaii for a contractual sales price of $62.0 million. In connection with the transaction, the third-party buyer assumed the existing outstanding mortgage indebtedness of $36.0 million. The net proceeds from the disposition of the Courtyard Kauai Coconut Beach Hotel were approximately $24.0 million, after the payment of closing costs, expenses, pro rations and other working capital adjustments and a payment of approximately $1.7 million to the minority owner of the Courtyard Kauai Coconut Beach Hotel. In connection with the sale of the Courtyard Kauai Coconut Beach Hotel, we recorded a gain on sale of real estate of $20.9 million.

In connection with the sale of the Courtyard Kauai Coconut Beach Hotel, approximately $27.0 million of funds were placed in escrow with a qualified intermediary in order to facilitate potential like-kind exchange transactions in accordance with Section 1031 of the Internal Revenue Code. These funds were subsequently used in connection with our acquisition of the Flats at Fishers on November 30, 2017, as discussed below.

Flats at Fishers

On November 30, 2017, we acquired the Flats at Fishers, a 306-unit multifamily property located in Fishers, Indiana from an unrelated third party for an aggregate purchase price of approximately $36.9 million, excluding closing and other related transaction costs. In connection with the acquisition, we incurred an aggregate of approximately $0.6 million in acquisition fees and acquisition expense reimbursements payable to Lightstone. The acquisition was funded with (i) approximately $27.0 million of funds that had been held in escrow by a qualified intermediary in connection with the sale of the Courtyard Kauai Coconut Beach and (ii) available cash.

The acquisition of the Flats at Fishers was accounted for under the purchase method of accounting with us treated as the acquiring entity. Accordingly, the consideration paid by us to complete the acquisition of the Flats at Fishers has been allocated to the assets acquired based upon their fair values as of the date of the acquisition. Approximately $6.9 million was allocated to land and improvements, $29.3 million was allocated to building and improvements, and $0.7 million was allocated to other assets.

The capitalization rate for the acquisition of the Flats at Fishers was approximately 3.8%. We calculate the capitalization rate for a real property by dividing net operating income of the property by the purchase price of the property, excluding costs. For purposes of this calculation, net operating income was based upon the twelve-month period ended June 30, 2017. Additionally, net operating income is all gross revenues from the property less all operating expenses, including property taxes and management fees but excluding depreciation.

Sales of Real Estate Reported in Continuing Operations

The following table presents our sale of real estate for the years ended December 31, 2017, 2016, and 2015 (dollars in millions):

		Ownership			Sales Contract		Net Cash		Gain on Sale of
Date of Sale	Property	Interest			Price		Proceeds⁽¹⁾		Real Estate
January 8, 2015	Babcock		85	%	$	5.4	$	5.2	$	2.0
February 21, 2015	AJS		99.7	%	$	14.1	$	13.0	$	3.3	⁽²⁾
September 1, 2015	Holstenplatz		100	%	$	18.4	$	18.0	$	8.6
September 9, 2015	Wimberly		95	%	$	43.5	$	42.9	$	8.9
August 16, 2016	Lakewood Flats		100	%	$	68.8	$	68.5	$	11.5
August 15, 2017	Courtyard Kauai Coconut Beach Hotel		80	%	$	62.0	$	24.0	$	20.9

(1)

A portion of the net cash proceeds was used to pay off the property-associated debt of $2.1 million, $6.5 million, $26.4 million, and $33.5 million for Babcock, AJS, Wimberly, and Lakewood Flats, respectively. The Holstenplatz debt was paid off on April 30, 2015. The property-associated debt of $36.0 million for the Courtyard Kauai Coconut Beach Hotel was assumed by the buyer.

(2)

The 2015 gain on sale for AJS of $3.3 million does not include an additional $0.1 million loss recorded in 2016 related to the final settlement of certain fees associated with our disposal of AJS.

The dispositions during 2017, 2016 and 2015 did not qualify to be reported as discontinued operations since they did not represent a strategic shift that had a major effect on our operations and financial results. Accordingly, the operating results of these disposed properties are reflected in our results from continuing operations for all periods presented through their respective date of disposition.

The following table presents net income attributable to the Company for the three years ended December 31, 2017, 2016 and 2015 related to the Courtyard Kauai Coconut Beach Hotel, Lakewood Flats, Babcock, AJS, Holstenplatz and Wimberly (dollars in millions):

	For the Year Ended December 31,
Description	2017		2016		2015
Net income attributable to the Company related to dispositions	$	16.9	$	12.4	$	17.4