Real Property Interests

3 Months Ended

Mar. 31, 2016

Real Property Interests

Real Property Interests

4. Real Property Interests

The following table summarizes the Partnership’s real property interests:

	March 31, 2016		December 31, 2015
Land	$	10,812,784	$	10,812,784
Real property interests – perpetual		88,496,491		88,496,491
Real property interests – finite life		268,126,508		269,577,699
Total land and real property interests		367,435,783		368,886,974
Accumulated amortization of real property interests		(15,773,223)		(14,114,307)
Land and net real property interests	$	351,662,560	$	354,772,667

On March 22, 2016, the Partnership completed a sale of one wireless communication site to a third party in exchange for cash consideration of $0.8 million. We recognized a gain on sale of real property interest of $0.4 million during the three months ended March 31, 2016.

On March 30, 2016, the Partnership completed a sale of 12 wireless communication sites to Landmark, in exchange for cash consideration of $2.0 million. The assets were originally acquired by Landmark and dropped-down to the Partnership during the July 21, 2015 and September 21, 2015 acquisitions. Landmark repurchased the pool of assets at the same purchase price sold to the Partnership. As the transaction is between entities under common control, the difference between the cash consideration and the net book value of the assets is allocated to the General Partner and no gain or loss is recognized.

During 2015, the Partnership completed the Acquisitions as described in Note 3, Acquisitions. The Partnership paid total consideration of $268.2 million. The Acquisitions are deemed to be transactions between entities under common control, which requires the assets and liabilities to be transferred at the historical cost of the parent of the entities, with prior periods retroactively adjusted to furnish comparative information. The differences totaling $69.4 million between the total consideration of $268.2 million and the historical cost basis of $198.8 million were allocated to the General Partner.

The Partnership applies the business combination method to all acquired investments of real property interests for transactions that meet the definition of a business combination. The fair value of the assets acquired and liabilities assumed is typically determined by using Level III valuation methods. The most sensitive assumption is the discount rate used to discount the estimated cash flows from the real estate rights. For purposes of the computation of fair value assigned to the various tangible and intangible assets, the Partnership assigned discount rates ranging between 6% and 20%.

The following table summarizes the final allocation for the Acquisitions of estimated fair values of the assets acquired and liabilities assumed at the date of acquisition by Landmark.

			Investments in real		In-place lease		Above-market		Below-market
Year	Land		property interests		intangibles		lease intangibles		lease intangibles		Total
2015(1)	$	4,919,474	$	76,267,203	$	2,441,472	$	2,518,355	$	(4,030,559)	$	82,115,945

(1) Prior-period financial information retroactively adjusted for Acquisitions made under common control. See Note 3 for additional information.

Future estimated aggregate amortization of real property interests for each of the five succeeding fiscal years and thereafter as of March 31, 2016, are as follows:

2016 (nine months)	$	5,073,036
2017		6,764,048
2018		6,580,186
2019		6,442,905
2020		6,349,541
Thereafter		221,143,569
Total	$	252,353,285

The weighted average remaining amortization period for non‑perpetual real property interests is 49 years at March 31, 2016.

During the three months ended March 31, 2015, eleven of the Partnership’s real property interests were impaired as a result of termination notices received and one property foreclosure. As a result of T‑Mobile’s acquisition of MetroPCS (completed in 2013), we have received termination notices related to 23 MetroPCS tenant sites, two of which have subsequently been rescinded. As of March 31, 2016, the majority of the MetroPCS tenant sites where we have received termination notices have been vacated. During the three months ended March 31, 2015, we recognized impairment charges totaling $2.8 million. The carrying value of each real property interest was determined to have a fair value of zero with the remaining lease intangibles amortized over the remaining lease life.