4.	Real Estate Assets, net

The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of December 31, 2016 and 2015 are as follows (in thousands):

	December 31,
	2016			2015
Land and land improvements	$	238,121		$	227,019
Building and building improvements		2,356,789			2,281,342
Furniture, fixtures and equipment		67,299			58,825
Less: accumulated depreciation		(195,216	)		(115,648	)
Real estate investment properties, net		2,466,993			2,451,538
Real estate under development, including land		97,164			62,521
Total real estate assets, net	$	2,564,157		$	2,514,059

Depreciation expense on the Company’s real estate investment properties, net was approximately $80.0 million, $63.6 million and $39.1 million for the years ended December 31, 2016, 2015 and 2014, respectively. These amounts include depreciation through the determination date on real estate held for sale (discussed below).

During 2016, the Company completed the construction on the final phase of the Raider Ranch community in Lubbock, Texas, all phases of the Watercrest at Katy community in Katy, Texas, and the Fieldstone at Pear Orchard community in Yakima, Washington. During 2015, the Company completed the development of a seniors housing community in Tega Cay, South Carolina (“Wellmore of Tega Cay”), which is a suburb of Charlotte, North Carolina, and the development of a seniors housing community in Shorewood, Wisconsin (“Harborchase of Shorewood”), which is north of Milwaukee. As such, the asset values related to these completed developments are included in real estate investment properties, net in the accompanying consolidated balance sheet as of December 31, 2016.

Real Estate Held For Sale

In June 2016, the Company committed to a plan to sell the Dogwood Forest of Acworth property and classified the associated real estate as held for sale. In November 2016, the Company completed the sale and recognized a gain on the sale of approximately $15.4 million. The sale of the Dogwood Forest of Acworth Property did not cause a strategic shift in the Company nor was it considered individually significant; therefore, it did not qualify as discontinued operations under ASU 2014-08.

4.	Real Estate Assets, net (continued)

As of December 31, 2016 and 2015, real estate held for sale consisted of the following (in thousands):

	December 31,
	2016		2015
Land and land improvements	$	―	$	2,027
Building and building improvements		―		15,994
Furniture, fixtures and equipment		―		1,776
Less: accumulated depreciation		―		(1,159	)
Real estate held for sale, net	$	―	$	18,638

Real Estate Under Development

As of December 31, 2016, five of the Company’s seniors housing communities and one post-acute care facility have real estate under development or expansion projects with third-party developers as follows (in thousands):

Property Name (and Location)	Developer	Real Estate Development Costs Incurred ⁽¹⁾		(Unaudited) Remaining Development Budget ⁽²⁾
Development Properties
Welbrook Senior Living Grand Junction (Grand Junction, CO)	Embree Asset Group, Inc.	$	12,894	$	1,888
Waterstone on Augusta (Greenville, SC)	T&D Greenville, LLC		24,155		5,046
Wellmore of Lexington (Lexington, SC)	Maxwell Group, Inc.		38,972		19,984
Dogwood Forest of Grayson (Grayson, GA)	Solomon Development Services, LLC		17,345		12,933
Expansion Projects
Tranquillity at Fredericktowne (Frederick, MD)	Capital Health Partners		1,407		4,542
Brookridge Heights Assisted Living & Memory Care (Marquette, MI)	Capital Health Partners		2,391		2,638
		$	97,164	$	47,031

FOOTNOTES:

⁽¹⁾

This amount represents land and total capitalized costs for GAAP purposes for the acquisition, development and construction of the seniors housing community or post-acute care facility as of December 31, 2016. Amounts include investment services fees, asset management fees, interest expense and other costs capitalized during the development period.

⁽²⁾

This amount includes preleasing and marketing costs which will be expensed as incurred.

The development budgets include the cost of the land, construction costs, development fees, financing costs, start-up costs and initial operating deficits of the respective properties. Generally, the Company has delegated to an affiliate of the developer of the respective community the management and administration of the development and construction. In most cases, the developer is generally responsible for cost overruns beyond the approved development budget for the applicable project pursuant to a cost overrun guarantee. Some of these developments were deemed to be VIEs; refer to Note 7. “Variable Interest Entities” for additional information.