LIABILITIES FOR ESTIMATED COSTS IN EXCESS OF ESTIMATED RECEIPTS DURING LIQUIDATION

9 Months Ended

Sep. 30, 2020

Liability during Liquidation [Abstract]

LIABILITIES FOR ESTIMATED COSTS IN EXCESS OF ESTIMATED RECEIPTS DURING LIQUIDATION

LIABILITIES FOR ESTIMATED COSTS IN EXCESS OF ESTIMATED RECEIPTS DURING LIQUIDATION

The liquidation basis of accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the Plan of Liquidation. As of September 30, 2020, the Company estimated that it will have costs in excess of estimated receipts during the liquidation process. These amounts can vary significantly due to, among other things, the timing and estimates for executing and renewing leases, estimates of tenant improvement costs and capital expenditures, the timing of property sales, direct costs incurred to complete the sales, the timing and amounts associated with discharging known and contingent liabilities and the costs associated with the winding down of operations. These costs are estimated and are anticipated to be paid out over the liquidation period.

Upon transition to the liquidation basis of accounting on February 1, 2020, the Company accrued the following revenues and expenses expected to be incurred during liquidation (in thousands):

	As of February 1, 2020
Rental income	$	77,940
Other operating income	7,650
Operating, maintenance, and management	(31,311)
Real estate taxes and insurance	(11,254)
Asset management fees due to affiliate	(7,883)
General and administrative expenses	(11,810)
Interest expense	(9,000)
Other interest income	3,448
Liquidating transaction costs	(3,500)
Capital expenditures	(146,524)
Liabilities for estimated costs in excess of estimated receipts during liquidation	$	(132,244)

The change in the liabilities for estimated costs in excess of estimated receipts during liquidation as of September 30, 2020 is as follows (in thousands):

	February 1, 2020		Cash Payments (Receipts)		Remeasurement of Assets and Liabilities		September 30, 2020
Assets:
Estimated net inflows from investments in real estate	$	34,025	$	(21,116)	$	8,043	$	20,952
	34,025		(21,116)		8,043		20,952
Liabilities:
Liquidation transaction costs	(3,500)		740		—		(2,760)
Corporate expenditures	(16,245)		7,136		(5,933)		(15,042)
Capital expenditures	(146,524)		36,542		(3,123)		(113,105)
	(166,269)		44,418		(9,056)		(130,907)
Total liabilities for estimated costs in excess of estimated receipts during liquidation	$	(132,244)	$	23,302	$	(1,013)	$	(109,955)