Subsequent Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

15. SUBSEQUENT EVENTS

On October 2, 2017, the Company entered into a lease and will commence construction on a 165,000 square foot building at Four Points in Austin, Texas. The project is 100% preleased to a single tenant under a 10-year lease. Estimated costs, including $2.1 million of existing land basis, total $48.2 million, with delivery anticipated in Q1 2019. The Company expects to fund the project with available cash balances and/or funds from its Credit Facility.

On October 16, 2017, the Company acquired through ground leases 3025 and 3001 Market Street, known as One Drexel Plaza and Drexel Square, respectively, located in Philadelphia, Pennsylvania, containing 282,709 rentable square feet, for a gross sales price of $35.0 million. The acquisition is an asset acquisition under ASU 2017-01. As such, we capitalized $2.7 million of transaction costs. Under the purchase agreement, the Company is obligated to incur a minimum of $8.0 million to improve One Drexel Plaza and Drexel Square over the next 24 months.

On October 18, 2017, DRA (G&I) Austin (the “DRA Austin Venture”), a real estate venture in which the Company holds a 50% interest, sold five office portfolios in Austin, Texas containing 1,164,496 square feet for a gross sales price of $333.3 million. Prior to the sale, the properties were encumbered by $151.0 million of mortgage debt. The Company’s share of cash proceeds, after payment of the DRA Austin Venture’s share of debt, closing costs and prorations was $86.4 million. The Company currently estimates its total gain on the transaction is approximately $52 million.