Property Dispositions and Discontinued Operations

6 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Property Dispositions and Discontinued Operations

Property Dispositions and Discontinued Operations

From time to time, we may decide to sell a property. We have an active capital recycling program in which we extend the average lease term through reinvestment, improve portfolio credit quality through dispositions and acquisitions of assets, increase the asset criticality factor in our portfolio and execute strategic dispositions of assets. We may make a decision to dispose of a property when it is vacant as a result of tenants vacating space, tenants electing not to renew their leases, tenant insolvency, or lease rejection in the bankruptcy process. In such cases, we assess whether we can obtain the highest value from the property by selling it, as opposed to re-leasing it. We may also sell a property when we receive an unsolicited offer or negotiate a price for an investment that is consistent with our strategy for that investment. For those properties sold prior to January 1, 2014, the current and prior period results of operations of the property have been reclassified as discontinued operations under current accounting guidance (Note 2).

Property Dispositions Included in Continuing Operations

During the six months ended June 30, 2014, we recognized a partial sale of a retail project and recognized a gain on disposition of real estate of $12.5 million (Note 4).

Property Dispositions Included in Discontinued Operations

The results of operations for properties that have been sold prior to January 1, 2014, and with which we have no continuing involvement, are reflected in the consolidated financial statements as discontinued operations and are summarized as follows (in thousands, net of tax):

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014		2013
Revenues	$	—	$	1,257		$	—	$	2,378
Expenses	—		(994		)	—		(1,886		)
Income from discontinued operations	$	—	$	263		$	—	$	492

In October 2013, we sold a hotel for $20.0 million, net of selling costs, and recognized a gain on the sale of $8.0 million. We repaid the related outstanding non-recourse mortgage loan of $5.1 million at the time of the sale and recognized a loss on the extinguishment of debt of $1.0 million.