Dispositions and Discontinued Operations

12 Months Ended

Dec. 31, 2020

Assets Of Disposal Group Including Discontinued Operation [Abstract]

Dispositions and Discontinued Operations

3.	Dispositions and Discontinued Operations

Dispositions

1633 Broadway

On May 27, 2020, we completed the sale of a 10.0% interest in 1633 Broadway, a 2.5 million square foot trophy office building located in New York City. The transaction valued the property at $2.4 billion, or $960 per square foot and included the assumption of the existing $1.25 billion mortgage loan. Accordingly, we realized net proceeds of $111,984,000 from the sale after transaction costs. Since we retained a controlling financial interest in 1633 Broadway and continue to consolidate the financial position and results of operations into our consolidated financial statements, the sale of the 10.0% interest was accounted for as an equity transaction.

Discontinued Operations

During the past three years, we sold the remaining assets in our Washington, D.C. portfolio, thereby exiting the Washington, D.C. office market. These dispositions represented a strategic shift in our operations and met the criteria of discontinued operations, under ASC Topic 205, Presentation of Financial Statements. Accordingly, we have reclassified the assets and liabilities and the results of operations of our Washington, D.C. segment as discontinued operations for all periods presented.

1899 Pennsylvania Avenue

On December 24, 2020, we completed the sale of 1899 Pennsylvania Avenue, a 191,000 square foot trophy office building located in Washington, D.C., for $103,000,000. We realized net proceeds of $89,206,000 from the sale after transaction costs and recognized a loss of $12,766,000, which is included as a component of “(loss) income from discontinued operations, net” on our consolidated statement of income for the year ended December 31, 2020.

Liberty Place

On September 26, 2019, we sold Liberty Place, a 172,000 square foot office building in Washington, D.C., for $154,500,000. In connection therewith, we recognized a gain of $1,140,000, which is included as a component of “(loss) income from discontinued operations, net” on our consolidated statement of income for the year ended December 31, 2019.

425 Eye Street

On September 27, 2018, we sold 425 Eye Street, a 373,000 square foot Class A office building in Washington, D.C., for $157,000,000. In connection therewith, we recognized a gain of $1,009,000, which is included as a component of “(loss) income from discontinued operations, net” on our consolidated statement of income for the year ended December 31, 2018.

2099 Pennsylvania Avenue

On August 9, 2018, we sold 2099 Pennsylvania Avenue, a 209,000 square foot Class A office building in Washington, D.C., for $219,000,000. In connection therewith, we recognized a gain of $35,836,000, which is included as a component of “(loss) income from discontinued operations, net” on our consolidated statement of income for the year ended December 31, 2018.

The tables below set forth the details of the assets and liabilities, results of operations and the details of the cash flows related to discontinued operations as of the dates thereof and for the periods set forth below.

(Amounts in thousands)	As of
Balance Sheet: ⁽¹⁾	December 31, 2019
Real estate, net	$	94,251
Deferred rent receivable		4,206
Deferred charges, net		804
Intangible assets, net		5,575
Assets related to discontinued operations	$	104,836

(Amounts in thousands)	For the Year Ended December 31,
Income Statements: ⁽²⁾	2020			2019			2018
Revenues:
Rental revenue	$	13,967		$	24,969		$	50,157
Other income		276			457			1,133
Total revenues		14,243			25,426			51,290
Expenses:
Operating		5,853			10,134			19,381
Depreciation and amortization		690			8,243			17,357
Total expenses		6,543			18,377			36,738
Other income (expense):
Interest and other income, net		-			-			181
Real estate impairment loss		-			(42,000	)		(46,000	)
Income (loss) before gain or loss on sale of real estate		7,700			(34,951	)		(31,267	)
(Loss) gain on sale of real estate ⁽³⁾		(12,766	)		1,140			36,845
(Loss) income before income taxes		(5,066	)		(33,811	)		5,578
Income tax expense		(9	)		-			-
(Loss) income from discontinued operations, net	$	(5,075	)	$	(33,811	)	$	5,578

	For the Year Ended December 31,
Statements of Cash Flows: ⁽²⁾	2020			2019			2018
Cash provided by operating activities	$	5,522		$	15,949		$	25,416

Cash provided by investing activities
Proceeds from sale of real estate ⁽⁴⁾	$	89,206		$	150,307		$	349,013
Additions to real estate		-			(1,514	)		(4,003	)
Total cash provided by investing activities	$	89,206		$	148,793		$	345,010

Cash used in financing activities	$	(96,896	)	$	(162,294	)	$	(370,626	)

Additional Cash Flow Information:
Depreciation and amortization	$	690		$	8,243		$	17,357

⁽¹⁾	Represents assets of 1899 Pennsylvania Avenue.

⁽²⁾

Represents revenues, expenses, net income, and cash flow information of 1899 Pennsylvania Avenue in the year ended December 31, 2020, 1899 Pennsylvania Avenue and Liberty Place in the year ended December 31, 2019 and 1899 Pennsylvania Avenue, Liberty Place, 425 Eye Street and 2099 Pennsylvania Avenue in the year ended December 31, 2018.

⁽³⁾	Represents the loss on sale of 1899 Pennsylvania Avenue in 2020, gain on sale of Liberty Place in 2019, and gain on sale of 425 Eye Street and 2099 Pennsylvania Avenue in 2018.

⁽⁴⁾	Represents the proceeds from the sale of 1899 Pennsylvania Avenue in 2020, Liberty Place in 2019, and 425 Eye Street and 2099 Pennsylvania Avenue in 2018.