Real Estate Activities

9 Months Ended

Sep. 30, 2019

Real Estate [Abstract]

Real Estate Activities

2. REAL ESTATE ACTIVITIES

Investments in real estate as of September 30, 2019 and December 31, 2018 were comprised of the following:

(in thousands of dollars)	September 30, 2019			December 31, 2018
Buildings, improvements and construction in progress	$	2,735,348		$	2,719,400
Land, including land held for development		466,257			465,194
Total investments in real estate		3,201,605			3,184,594
Accumulated depreciation		(1,181,848	)		(1,118,582	)
Net investments in real estate	$	2,019,757		$	2,066,012

Capitalization of Costs

The following table summarizes our capitalized interest, compensation, including commissions, and real estate taxes for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands of dollars)	2019		2018		2019		2018
Development/Redevelopment Activities:
Interest (1)	$	2,683	$	1,821	$	7,012	$	4,728
Compensation		281		352		969		1,067
Real estate taxes		524		430		945		810
Leasing Activities:
Compensation, including commissions (2)		108		1,482		413		5,423

⁽¹⁾ Includes interest capitalized on investments in partnerships under development.

⁽²⁾ The definition of initial direct costs under ASC 842 includes only those incremental costs of a lease that would not have been incurred if the lease had not been obtained. As discussed above, certain internal leasing and legal costs that were previously capitalized under ASC 840 are now recorded as period costs under ASC 842. Commissions paid for successful leasing transactions will continue to be capitalized.

Dispositions

In March 2019, we entered into an agreement of sale with a buyer to sell an undeveloped land parcel located in Gainesville, Florida for total consideration of $15.0 million and the sale transaction was split into two parcels. The first parcel was sold in March 2019 for $5.0 million. We currently expect the transaction with respect to the remaining parcel to close before the end of 2019. In connection with these transactions, we recorded losses on impairment of assets of $1.5 million. The remaining land parcel was classified as held for sale in our consolidated balance sheet as of September 30, 2019.

In April 2019, we sold an undeveloped land parcel located in New Garden Township, Pennsylvania, for total consideration of $11.0 million, consisting of $8.25 million in cash and $2.75 million of preferred stock. We ascribed no value for accounting purposes to the preferred shares as they are not tradeable, cannot be transferred or sold and have no redemption feature. Up to $1.25 million of the cash consideration received is subject to claw-back if the buyer does not receive entitlements for a stipulated number of housing units, which has been recorded as a liability in our consolidated balance sheet. In connection with this sale, we recorded a gain of $0.2 million.

In April 2019, we sold a Whole Foods store located on a parcel adjacent to Exton Square Mall for total consideration of $22.1 million. In connection with this sale, we recorded a gain of $1.3 million.

In July 2019, we sold an outparcel located at Valley View Mall in La Crosse, Wisconsin for total consideration of $1.4 million. In connection with this sale, we recorded a gain of $1.2 million.

In September 2019, we conveyed Wyoming Valley Mall to the lender of the mortgage loan secured by the property. The loan had a balance of approximately $72.8 million as of the conveyance on September 26, 2019. As a result of the transfer, having previously recognized an asset impairment loss of approximately $32.2 million on the value of the property, we wrote off the remaining carrying value of the property of $43.2 million and recorded a net gain on extinguishment of debt of $29.6 million in the three months ended September 30, 2019.