Property and Equipment, Net

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

5. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following at December 31 (in thousands):


	2017			2016
Land	$	972		$	543
Equipment		12,171			10,094
Furniture, fixtures, and leasehold improvements		21,280			15,415
Computer hardware, software, and phone equipment		9,571			7,535
Buildings		2,559			2,253
Deemed assets from landlord building construction		22,752			22,752
Construction-in-progress		5,554			2,840
Property and equipment at cost		74,859			61,432
Less: Accumulated depreciation		(26,120	)		(17,627	)
Property and equipment, net	$	48,739		$	43,805

Depreciation expense, which includes amortization from capital leases, was $8.6 million and $7.4 million for the years December 31, 2017 and 2016, respectively.

In 2011, Medpace, Inc. entered into two multi-year lease agreements governing the future occupancy of additional office space in Cincinnati, Ohio. The Company assumed occupancy of both spaces during 2012 and began making lease payments at that time. The leases expire in 2027 and the Company has one 10-year option to extend the term of the leases.

In accordance with the accounting guidance related to leases, the Company was deemed in substance to be the owner of the property during the construction phase. The accounting guidance requires that a lessee be considered the owner of a real estate project during the construction period if a related party of the lessee is an owner of the real estate. Given that a related party of Medpace made an equity investment in the lessor, Medpace was considered the owner of the property for accounting purposes during the buildings’ construction. Accordingly, the Company reflected the building and related liabilities as Deemed assets from landlord building construction (“Deemed Assets”) and Deemed landlord liabilities, respectively in the consolidated balance sheets. The Deemed Assets are being fully depreciated, on a straight line basis, over the 15-year term of the lease.