Note 6 – Property Acquired, Property Sold, Property Held for Sale, Property Held For and Under Development, and Property and Equipment

Properties Held for Sale

Indooroopilly Sale Agreement

Effective October 5, 2012, we entered into an agreement to sell our Indooroopilly property for $12.4 million (AUS$12.0 million) (See Note 18 – Subsequent Events). As the book value at September 30, 2012 was $12.5 million (AUS$12.1 million) for this property, we recorded an impairment expense of $283,000 (AUS$272,000) for the three and nine months ended September 30, 2012 including the cost to sell the property. We anticipate the sale of the property to close by the end of November 2012. The net book value of this property’s assets is included in assets held for sale on our Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011 and the operational results are included in income (loss) from discontinued operations on our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011. The condensed statement of operations for Indooroopilly is as follows (dollars in thousands):



		Three Months Ended September 30,				Nine Months Ended September 30,
		2012		2011		2012		2011
Revenue	$	210	$	207	$	627	$	619
Less: operating expense		168		152		465		449
Less: impairment expense		283		--		283		--
Income (loss) from discontinued operations, net of tax	$	(241)	$	55	$	(121)	$	170

Lake Taupo

The agreement to sell our Lake Taupo property for $3.9 million (NZ$4.9 million) entered into on July 20, 2012 has been terminated. As of June 30, 2012, the property had a book value of $2.1 million (NZ$2.6 million) and was classified as a property held for sale on our balance sheet as of that date. As the ultimate sale of the property and timing of the disposition of this property is in question, per ASU 360-10-45-9, the book value of this property is included as property held for development and property and equipment on our Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011.

Acquisitions

Coachella, California Land Acquisition

On January 10, 2012, Shadow View Land and Farming, LLC, a limited liability company owned by our Company, acquired a 202-acre property, zoned for the development of up to 843 single-family residential units, located in the City of Coachella, California. The property was acquired at a foreclosure auction for $5.5 million. The property was acquired as a long-term investment in developable land. Half of the funds used to acquire the land were provided by Mr. James J. Cotter, our Chairman, Chief Executive Officer and controlling shareholder. Upon the approval of our Conflicts Committee, these funds were converted on January 18, 2012 into a 50% interest in Shadow View Land and Farming, LLC. We are the managing member of this company. See Note 14 – Noncontrolling Interests.

Disposals

Taringa

On February 21, 2012, we sold our three properties in the Taringa area of Brisbane, Australia consisting of approximately 1.1 acres for $1.9 million (AUS$1.8 million).

Property Held For and Under Development

As of September 30, 2012 and December 31, 2011, we owned property held for and under development summarized as follows (dollars in thousands):



Property Held For and Under Development		September 30, 2012		December 31, 2011
Land	$	94,255	$	86,667
Construction-in-progress (including capitalized interest)		4,533		4,032
Property Held For and Under Development	$	98,788	$	90,699

At the beginning of 2010, we curtailed the development activities of our properties under development and are not currently capitalizing interest expense. As a result, we did not capitalize any interest during the three and nine months ended September 30, 2012 or 2011.

Property and Equipment

As of September 30, 2012 and December 31, 2011, we owned investments in property and equipment as follows (dollars in thousands):



Property and Equipment		September 30, 2012		December 31, 2011
Land	$	63,692	$	62,873
Building and improvements		138,611		134,967
Leasehold interests		42,137		40,855
Construction-in-progress		2,147		525
Fixtures and equipment		107,122		103,872
Total cost		353,709		343,092
Less: accumulated depreciation		(152,766)		(139,312)
Property and equipment, net	$	200,943	$	203,780

Depreciation expense for property and equipment was $3.6 million and $11.0 million for the three and nine months ended September 30, 2012, respectively, and $4.0 million and $11.7 million for the three and nine months ended September 30, 2011, respectively.