Discontinued Operations, Assets Held-for-Sale and Impairments

The following table illustrates the number of sold or held-for-sale properties included in, or excluded from, discontinued operations:



	Held For Sale at December 31, 2014	Sold in 2014	Sold in 2013	Sold in 2012	Total
Office	0	0	12	10	22
Industrial	0	11	6	17	34
Medical Office	1	1	6	0	8
Retail	0	0	1	1	2
Total properties included in discontinued operations	1	12	25	28	66
Properties excluded from discontinued operations	1	17	13	0	31
Total properties sold or classified as held-for-sale	2	29	38	28	97

We allocate interest expense to discontinued operations and have included such interest expense in computing income from discontinued operations. Interest expense allocable to discontinued operations includes interest on any secured debt for properties included in discontinued operations and an allocable share of our consolidated unsecured interest expense for unencumbered properties. The allocation of unsecured interest expense to discontinued operations was based upon the gross book value of the unencumbered real estate assets included in discontinued operations as it related to the total gross book value of our unencumbered real estate assets.

The following table illustrates the operations of the buildings reflected in discontinued operations for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands):



	2014			2013			2012
Revenues	$	3,031		$	47,843		$	72,645
Operating expenses	(1,213		)	(18,014		)	(26,364		)
Depreciation and amortization	(205		)	(16,423		)	(31,151		)
Operating income	1,613			13,406			15,130
Interest expense	(921		)	(11,499		)	(18,846		)
Income (loss) before gain on sales	692			1,907			(3,716		)
Gain on sale of depreciable properties	22,763			133,242			13,467
Income from discontinued operations before income taxes	23,455			135,149			9,751
Income tax expense	(2,969		)	—			—
Income from discontinued operations	$	20,486		$	135,149		$	9,751

Income tax expense included in discontinued operations was the result of the sale of a property, prior to the adoption of ASU 2014-08, that was partially owned by our taxable REIT subsidiary where we have no continuing involvement.

Dividends or distributions on preferred shares or Preferred Units and adjustments for the redemption or repurchase of preferred shares or Preferred Units are allocated entirely to continuing operations for both the General Partner and the Partnership.

Allocation of Noncontrolling Interests - General Partner

The following table illustrates the General Partner's share of the income (loss) attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income or loss between continuing and discontinued operations to noncontrolling interests, for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands):



	2014		2013		2012
Income (loss) from continuing operations attributable to common shareholders	$	184,667	$	22,982	$	(135,724	)
Income from discontinued operations attributable to common shareholders	20,226		130,062		9,579
Net income (loss) attributable to common shareholders	$	204,893	$	153,044	$	(126,145	)

Allocation of Noncontrolling Interests - Partnership

Substantially all of the income from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders, with the exception of the 2013 sale of a property from a consolidated real estate joint venture.

Properties Held for Sale

At December 31, 2014, we classified one in-service property as held-for-sale, which is included in discontinued operations. Additionally, we have classified one in-service property as held-for-sale, but have included the results of operations of this property in continuing operations because it did not qualify as a discontinued operation pursuant to ASC 2014-08. Certain parcels of undeveloped land were also classified as held-for-sale at December 31, 2014. At December 31, 2013, we classified eleven in-service properties as held-for-sale. The following table illustrates aggregate balance sheet information of these held-for-sale properties (in thousands):



	December 31, 2014			December 31, 2013
Land and improvements	$	26,614		$	8,603
Buildings and tenant improvements	47,782			53,324
Undeveloped land	12,443			—
Accumulated depreciation	(24,552		)	(14,351		)
Deferred leasing and other costs, net	7,642			6,435
Other assets	1,596			3,455
Total assets held-for-sale	$	71,525		$	57,466

Accrued expenses	$	428		$	1,481
Other liabilities	575			594
Total liabilities held-for-sale	$	1,003		$	2,075

Impairment Charges

The following table illustrates impairment charges recognized during the years ended December 31, 2014 and 2013, respectively (in thousands):



	2014		2013
Impairment charges - land	$	33,700	$	3,777
Impairment charges - building	15,406		—
Impairment charges	$	49,106	$	3,777

As the result of an analysis that triggered changes in our intended use for a portion of our undeveloped land inventory, we recognized impairment charges of $33.7 million for the year ended December 31, 2014 as the result of writing down various parcels of land, totaling 442 acres, to fair value. As part of determining the fair value in connection with the impairment analysis, we considered comparable transactions and, in certain cases, estimates made by national and local independent real estate brokers who were familiar with the properties and land parcels subject to evaluation as well as with conditions in the specific markets where the various properties and land parcels are located. In all cases, members of our senior management who were responsible for the individual markets where the properties and land parcels are located and members of the Company’s accounting and financial management team reviewed the broker’s estimates for factual accuracy and reasonableness. In all cases, we were ultimately responsible for all valuation estimates made in determining the extent of the impairment. Our valuation estimates primarily relied upon Level 3 inputs.

During the fourth quarter of 2014, we completed a review of our existing portfolio of buildings and determined that certain buildings, which had previously not been actively marketed for disposal, were not strategic and would not be held as long-term investments. Impairment charges of $15.4 million were recognized for six buildings that were determined to be impaired as the result of this change to management's strategy. Our estimates of fair value for these buildings were based primarily upon asset-specific purchase and sales contracts as well as using the income approach for a single property. For the property for which the income approach was utilized in determining fair value, which was an office property in Washington D.C., the most significant assumptions utilized were the exit capitalization rate of 8.50% and the net rental rate of $12.50 per square foot. We have concluded that our valuation estimates for the building impairments recognized during 2014 were primarily based on Level 3 inputs.