Net Investments in Properties

6 Months Ended

Jun. 30, 2012

Real Estate Owned Disclosure Of Detailed Components [Abstract]

Real Estate Disclosure [Text Block]

Note 4.Net Investments in Properties and Real Estate Under Construction

Real Estate

Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, is summarized as follows (in thousands):

	June 30, 2012		December 31, 2011
Land	$	425,579	$	390,445
Buildings		1,279,070		1,109,706
Less: Accumulated depreciation		(56,411)		(40,522)
	$	1,648,238	$	1,459,629

Acquisitions of Real Estate

During the six months ended June 30, 2012, we entered intothe following investments, which were classified as operating leases, at a total cost of $174.0 million, including net lease intangible assets totaling $45.3 million(Note 7) and acquisition-related costs and fees:

• a domestic investment for $169.0 million with Blue Cross Blue Shield, Inc (“BCBS”) for eight office facilities. The purchase price was allocated to the assets acquired, based upon their fair values; and
• two domestic follow-on transactions in an existing investment for a total cost of $5.0 million.

In connection with these investments, which we deemed to bereal estate asset acquisitions under current authoritative accounting guidance, we capitalized acquisition-related costs and fees totaling $8.2 million.

Assets disposed of during the current year period are discussed in Note 13.During this period, the U.S. dollar strengthened against the Euro, as the end-of-period rate for the U.S. dollar in relation to the Euro at June 30, 2012 decreased 3% to $1.2578 from $1.2950 at December 31, 2011. The impact of this strengthening was a $20.9 million decrease in Real estate from December 31, 2011 to June 30, 2012.

Operating Real Estate

Operating real estate, which consists primarily ofour hotel and self-storage operations, at cost, is summarized as follows (in thousands):

	June 30, 2012		December 31, 2011
Land	$	47,461	$	43,950
Buildings		146,772		132,478
Furniture, fixtures & equipment		1,191		1,713
Less: Accumulated depreciation		(4,600)		(2,745)
	$	190,824	$	175,396

Acquisitions of Operating Real Estate

During the six months ended June 30, 2012, we acquired five self-storage properties throughout the U. S. for a total cost of $16.8 million, including lease intangible assets of $2.2 million (Note 7). As these acquisitions were deemed to be business combinations under current authoritative accounting guidance, we expensed the acquisition-related costs totaling $0.4million, which are included in General and administrative expenses in the consolidated financial statements.

Real Estate Under Construction

During the six months ended June 30, 2012, we entered into two build-to-suit projects, which consisted of the following:

• one project with Nippon Sheet Glass Co., Ltd. for the construction of a warehouse located in Poland for a total cost of up to $26.6 million, of which we funded $13.3 million through June 30, 2012. Amounts are based on the exchange rate of the Euro on the date of acquisition; and
• one domestic project with Sabre Communications Corp. for the construction of a new facility for a total cost of up to $17.8 million, of which we funded $0.9 million through June 30, 2012.

Amounts above are based on the estimated construction costs at the respective dates of acquisition, including acquisition-related costs and fees. In connection with these investments, which were deemed to be real estate acquisitions under current authoritative accounting guidance, we capitalized acquisition-related costs and fees totaling $2.4 million.

During the six months ended June 30, 2012, we also funded $24.3 million and placed assets totaling $114.8 million into service, which are now classified as Real Estate, at cost, for projects that we entered into in 2011 and 2010. In connection with our build-to-suit projects, we capitalized interest totaling $1.1 millionduring the six months ended June 30, 2012.

At June 30, 2012, the unfunded commitments on these projects totaled approximately $63.5 million.

Asset Retirement Obligations

We have recorded asset retirement obligations for the removal of asbestos and environmental waste in connection with several of our acquisitions. We estimated the fair value of the asset retirement obligations based on the estimated economic lives of the properties and the estimated removal costs provided by the inspectors. The liability was discounted using the weighted-average interest rate on the associated fixed-rate mortgage loans at the time the liability was incurred.

The following table provides a reconciliation of our asset retirement obligations, which are included in Accounts payable, accrued expenses and other liabilities on the consolidated balance sheets, for the periods presented (in thousands):

	June 30, 2012		December 31, 2011
Balance - beginning of period	$	11,453	$	1,508
Additions		3,680		9,562
Accretion expense		231		250
Foreign currency translation adjustments and other		156		133
Balance - end of period	$	15,520	$	11,453