REAL ESTATE ACTIVITIES

Investments in real estate as of December 31, 2016 and 2015 were comprised of the following:



	As of December 31,
(in thousands of dollars)	2016			2015
Buildings, improvements and construction in progress	$	2,794,213		$	2,847,986
Land, including land held for development	505,801			519,903
Total investments in real estate	3,300,014			3,367,889
Accumulated depreciation	(1,060,845		)	(1,015,647		)
Net investments in real estate	$	2,239,169		$	2,352,242

Impairment of Assets

During the years ended December 31, 2016, 2015, and 2014, we recorded asset impairment losses of $62.6 million, $140.3 million and $19.7 million, respectively. Such impairment losses are recorded in “Impairment of assets” for the years ended 2016, 2015 and 2014. The assets that incurred impairment losses and the amount of such losses are as follows:



	For the Year Ended December 31,
(in thousands of dollars)	2016		2015		2014
White Clay Point land	$	20,786	$	—	$	—
Beaver Valley Mall	18,055		—		—
Washington Crown Center	14,117		—		—
Crossroads Mall	9,038		—		—
Office building located at Voorhees Town Center	607		—		—
Gadsden Mall, New River Valley Mall and Wiregrass Commons Mall	—		63,904		—
Voorhees Town Center	—		39,242		—
Lycoming Mall	—		28,345		—
Uniontown Mall	—		7,394		—
Palmer Park Mall	—		1,383		—
Nittany Mall	—		—		15,495
North Hanover Mall	—		—		2,900
South Mall	—		—		1,300
Other	—		50		—
Total Impairment of Assets	$	62,603	$	140,318	$	19,695

White Clay Point land

In 2016, we recorded a loss on impairment of assets on White Clay Point land, in New Garden Township, Pennsylvania of $20.8 million. In connection with our decision to market the property, which we concluded was a triggering event, we conducted an analysis of possible impairment at this property. We determined that the estimated proceeds from a potential sale of the property, would likely be less than the carrying value of the property, and recorded a loss on impairment of assets.

Beaver Valley Mall

In 2016, we recorded a loss on impairment of assets on Beaver Valley Mall, in Monaca, Pennsylvania of $18.1 million in connection with negotiations with the buyer of the property. In connection with these negotiations, we determined that the holding period of the property was less than previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible impairment at this property. Based upon the negotiations, we determined that the estimated undiscounted cash flows, net of capital expenditures for the property, were less than the carrying value of the property, and recorded a loss on impairment of assets. The property is classified as “held for sale” as of December 31, 2016. The property was sold in January 2017.

Washington Crown Center

In 2016, we recorded a loss on impairment of assets on Washington Crown Center, in Washington, Pennsylvania of $14.1 million in connection with negotiations with the buyer of the property. In connection with these negotiations, we determined that the holding period of the property was less than previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible impairment at this property. Based upon the negotiations, we determined that the estimated undiscounted cash flows, net of capital expenditures for the property, were less than the carrying value of the property, and recorded a loss on impairment of assets. The property was sold in August 2016.

Crossroads Mall

In 2016, we recorded a loss on impairment of assets on Crossroads Mall, in Beckley, West Virginia of $9.0 million in connection with negotiations with the buyer of the property. In connection with these negotiations, we determined that the holding period of the property was less than previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible impairment at this property. Based upon the negotiations, we determined that the estimated undiscounted cash flows, net of capital expenditures for the property, were less than the carrying value of the property, and recorded a loss on impairment of assets. The property is classified as “held for sale” as of December 31, 2016. The property was sold in January 2017.

Office building located at Voorhees Town Center

In 2016, we recorded a loss on impairment of assets on an office building located in Voorhees, New Jersey of $0.6 million in connection with negotiations with a the buyer of the property. In connection with these negotiations, we determined that the holding period of the property was less than previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible impairment at this property. Based upon the negotiations, we determined that the estimated undiscounted cash flows, net of capital expenditures for the property, were less than the carrying value of the property, and recorded a loss on impairment of assets. The property was sold in September 2016.

Gadsden Mall, New River Valley Mall and Wiregrass Commons Mall

In 2015, we recorded aggregate losses on impairment of assets on Gadsden Mall in Gadsden, Alabama, New River Valley Mall in Christiansburg, Virginia and Wiregrass Commons Mall in Dothan, Alabama of $63.9 million in connection with negotiations with a prospective buyer of the properties. As a result of these negotiations, we determined that the holding period for the properties was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at these properties. Based upon the purchase and sale agreement with the prospective buyer of the properties and subsequent further negotiations, we determined that the estimated aggregate undiscounted cash flows, net of estimated capital expenditures, for Gadsden Mall, New River Valley Mall and Wiregrass Commons Mall were less than the aggregate carrying value of the properties, and recorded a loss on impairment of assets. The properties were sold in March 2016.

Voorhees Town Center

In 2015, we recorded a loss on impairment of assets on Voorhees Town Center in Voorhees, New Jersey of $39.2 million in connection with negotiations with the buyer of the property. In connection with these negotiations, we determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the purchase and sale agreement with the buyer of the property, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Voorhees Town Center were less than the carrying value of the property, and recorded a loss on impairment of assets. The property was sold in October 2015.

Lycoming Mall

In 2015, we recorded aggregate losses on impairment of assets on Lycoming Mall in Pennsdale, Pennsylvania of $28.3 million in connection with negotiations with a prospective buyer of the property. In connection with these negotiations, we determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the initial purchase and sale agreement with the prospective buyer of the property, which has since been terminated, as well as a subsequent purchase and sale agreement, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Lycoming Mall were less than the carrying value of the property, and recorded a loss on impairment of assets. The property was sold in March 2016.

Uniontown Mall

In 2015, we recorded aggregate losses on impairment of assets on Uniontown Mall in Uniontown, Pennsylvania of $7.4 million. In connection with negotiations with the buyer of the property, we had determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the original purchase and sale agreement with the buyer of the property and subsequent further negotiations, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Uniontown Mall were less than the carrying value of the property, and recorded both an initial loss on impairment of assets and a subsequent additional loss on impairment of assets. The property was sold in August 2015.

Palmer Park Mall

In 2015, we recorded a loss on impairment of assets on Palmer Park Mall in Easton, Pennsylvania of $1.4 million. In connection with negotiations with the buyer of the property, we had determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the purchase and sale agreement with the buyer of the property and subsequent further negotiations, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Palmer Park Mall were less than the carrying value of the property, and recorded a loss on impairment of assets. The property was sold in February 2016.

Nittany Mall

In 2014, we recorded aggregate losses on impairment of assets at Nittany Mall of $15.5 million after entering into negotiations with the then-prospective buyer of the property. As a result of these negotiations, we determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the purchase and sale agreement with the then-prospective buyer of the property and subsequent further negotiations, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Nittany Mall were less than the carrying value of the property, and recorded both an initial loss on impairment of assets and a subsequent additional loss on impairment of assets when we sold the property in September 2014.

North Hanover Mall

In 2014, we recorded aggregate losses on impairment of assets at North Hanover Mall of $2.9 million after entering into negotiations with the then-prospective buyer of the property. As a result of these negotiations, we determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the purchase and sale agreement with the then-prospective buyer of the property and subsequent further negotiations, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for North Hanover Mall were less than the carrying value of the property, and recorded both an initial loss on impairment of assets and a subsequent additional loss on impairment of assets. We previously recognized losses on impairment of assets on North Hanover Mall of $2.9 million in 2013 and $24.1 million in 2011. The property was sold in September 2014.

South Mall

In 2014, we recorded a loss on impairment of assets at South Mall of $1.3 million after entering into negotiations with the buyer of the property. As a result of these negotiations, we determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Using updated assumptions, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for South Mall were less than the carrying value of the property, and recorded a loss on impairment of assets. The property was sold in June 2014.

Acquisition

On March 31, 2015, we acquired Springfield Town Center in Springfield, Virginia for aggregate consideration of $486.6 million, consisting of the following components: (i) the assumption and immediate payoff of $263.8 million of indebtedness owed to affiliates of Vornado Realty L.P.; (ii) 6,250,000 OP Units valued at $145.2 million, (iii) liabilities relating to tenant improvements and allowances of $14.8 million, (iv) the estimated present value of the “Earnout” (as described below) of $8.6 million, and (v) the remainder in cash. The seller is potentially entitled to receive consideration (the “Earnout”) under the terms of the Contribution Agreement which will be calculated as of March 31, 2018. As of December 31, 2016, the estimated value of the Earnout is zero. The table below sets forth our allocation of the purchase price:



(in thousands of dollars)
Land		$	119,912
Building		299,012
Common area improvements		16,776
Site improvements and tenant improvements		35,565
Intangible assets (liabilities):
	In-place lease value	18,123
	Above market lease value	260
	Below market lease value	(393		)
	Above market ground lease value (as lessor)	(5,882		)
Deferred and other assets		3,231
Total		$	486,604

Dispositions

The table below presents our dispositions since January 1, 2014. Proceeds from property sales were used for general corporate purposes, repayment of mortgage loans that secured the properties (if applicable) and repayment of then-outstanding amounts on our Credit Agreements (see note 4), unless otherwise noted.



Sale Date	Property and Location	Description of Real Estate Sold	Capitalization Rate		Sale Price		Gain/ (Loss)
Sale Date	Property and Location	Description of Real Estate Sold	Capitalization Rate		(in millions of dollars)
2017 Activity:
January	Beaver Valley Mall, Monaca, Pennsylvania	Mall	15.6	%	$	24.2	$	—
	Crossroads Mall, Beckley, West Virginia	Mall	15.5	%	24.8		—

2016 Activity:
February	Palmer Park Mall, Easton, Pennsylvania	Mall	13.6	%	18.0		0.1
March	Gadsden Mall, Gadsden, Alabama; New River Valley Mall, Christiansburg, Virginia; and Wiregrass Commons Mall, Dothan, Alabama⁽¹⁾	Three Malls (single combined transaction)	17.4	%	66.0		1.6
	Lycoming Mall Pennsdale, Pennsylvania	Mall	18.0	%	26.4		0.3
June	Street retail located on Walnut and Chestnut Streets, Philadelphia, Pennsylvania	Street Retail	3.2	%	45.0		20.3
August	Washington Crown Center, Washington, Pennsylvania	Mall	14.5	%	20.0		(0.1		)

2015 Activity:
August	Uniontown Mall, Uniontown, Pennsylvania	Mall	17.5	%	23.0		—
October	Voorhees Town Center, Voorhees, New Jersey	Mall	10.3	%	13.4		—

2014 Activity:
June	South Mall Allentown, Pennsylvania	Mall	10.1	%	23.6		0.2
July	The Gallery at Market East Philadelphia, Pennsylvania	Mall (50% interest)⁽²⁾	5.1	%	106.8		(0.6		)
September	North Hanover Mall, Hanover, Pennsylvania and Nittany Mall State College, Pennsylvania	Two malls (single combined transaction)	North Hanover Mall 11.0% Nittany Mall 16.2%		32.3		(0.1		)

⁽¹⁾

In connection with this transaction, we issued a mortgage loan to the buyer for $17.0 million, which is recorded in “Deferred costs and other assets, net” on our consolidated balance sheet. The mortgage loan is secured by Wiregrass Commons Mall, bears interest at a fixed rate of 6.00% per annum and has a maturity of April 2026. As of December 31, 2016, the balance of the mortgage loan was $16.8 million.

⁽²⁾

We entered into a 50/50 joint venture with Macerich to redevelop The Gallery into the Fashion Outlets of Philadelphia. In connection therewith, we contributed and sold real estate assets to the venture and Macerich acquired its interest in the venture and real estate from us for $106.8 million in cash. Net proceeds after closing costs from the sale of the interests were $104.0 million. We used $25.8 million of such proceeds to repay a mortgage loan secured by 801 Market Street, Philadelphia, Pennsylvania, a property that is part of The Gallery, $50.0 million to repay the outstanding balance on our 2013 Revolving Facility, and the remaining proceeds for general corporate purposes.

Dispositions – Other Activity

In 2016, we sold an office building adjacent to Voorhees Town Center for $4.0 million, and recorded a gain of $0.1 million.

In 2016, we sold three land parcels for an aggregate sales price of $4.9 million, and a net gain on sales of real estate of $0.6 million.

In 2016, we sold a non operating parcel located at Francis Scott Key Mall for $0.4 million and recorded a gain of $0.2 million.

In 2015, we sold several outparcels for an aggregate sales price of $5.1 million. We recorded net gains on sales of real estate of $0.6 million on these transactions.

In 2014, we sold an anchor pad, outparcels and undeveloped land for an aggregate sales price of $9.9 million. We recorded net gains on sales of interests in real estate of $0.7 million and a net gain on sales on non operating real estate of $1.8 million on these transactions.

Development Activities

As of December 31, 2016 and 2015, we had capitalized amounts related to construction and development activities. The following table summarizes certain capitalized construction and development information for our consolidated properties as of December 31, 2016 and 2015:



	As of December 31,
(in thousands of dollars)	2016		2015
Construction in progress	$	97,575	$	64,019
Land held for development	5,910		6,350
Deferred costs and other assets	2,752		2,332
Total capitalized construction and development activities	$	106,237	$	72,701

As of December 31, 2016, we had $0.1 million of refundable deposits on land and building purchase contracts.