Real Estate Properties

6 Months Ended

Jun. 30, 2013

Real Estate Properties

Real Estate Properties

Note 3. Real Estate Properties

As of June 30, 2013, we owned 82 properties with an undepreciated carrying value of $1,526,678. We generally lease space in our properties on a gross lease or modified gross lease basis pursuant to fixed term operating leases expiring between 2013 and 2033. Certain of our government tenants have the right to terminate their leases before the lease term expires. Our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the three months ended June 30, 2013, we entered into 16 leases for 314,527 rentable square feet for a weighted average (by square feet) lease term of 13.4 years and we made commitments for approximately $5,191 of leasing related costs. During the six months ended June 30, 2013, we entered into 22 leases for 513,045 rentable square feet for a weighted average (by square feet) lease term of 9.7 years and we made commitments for approximately $9,802 of leasing related costs. We have unspent leasing related obligations of approximately $13,600 as of June 30, 2013.

In February 2013, we sold an office property located in Oklahoma City, OK with 185,881 rentable square feet and a net book value of $8,069 for $16,300, excluding closing costs, and recognized a gain on sale of $8,198.  In March 2013, we sold an office property located in Tucson, AZ with 31,051 rentable square feet and a net book value of $2,080 for $2,189, excluding closing costs, and recognized a loss on sale of $30.

Results of operations for properties sold are included in discontinued operations in our condensed consolidated statements of income and comprehensive income once the criteria for discontinued operations in the Presentation of Financial Statements Topic of the FASB Accounting Standards Codification TM are met.  Summarized income statement information for properties sold is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2013		2012			2013			2012
Rental income	$	—	$	465		$	244		$	923
Real estate taxes	—		(50		)	(35		)	(104		)
Utility expenses	—		(77		)	(48		)	(181		)
Other operating expenses	—		(93		)	(61		)	(179		)
Depreciation and amortization	—		(158		)	(45		)	(320		)
General and administrative	—		(39		)	(25		)	(76		)
Income from discontinued operations	$	—	$	48		$	30		$	63

In July 2013, we entered an agreement to acquire a warehouse property located in Chester, Virginia with 228,108 rentable square feet.  This property is 100% leased to the U.S. Government and occupied by the United States Army.  The contract price is $12,750, excluding acquisition costs.  This pending acquisition is subject to our satisfactory completion of diligence and other customary closing conditions; accordingly, we can provide no assurance that we will acquire this property or that the acquisition will not be delayed or that the terms will not change.