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Note 2 - Operating Property Activities
 9 Months Ended
Sep. 30, 2014
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]

2. Operating Property Activities


Acquisitions -


During the nine months ended September 30, 2014, the Company acquired the following properties, in separate transactions (in thousands):


           

Purchase Price

 

Property Name

 

Location

 

Month

Acquired

 

Cash*

   

Debt Assumed

   

Other

   

Total

   

GLA**

 

North Valley Leasehold

 

Peoria, AZ

 

Jan-14

  $ 3,000     $ -     $ -     $ 3,000       -  

LaSalle Properties (3 properties)

 

Various (1)

 

Jan-14

    62,239       23,269       7,642       93,150       316  

Harrisburg Land Parcel

 

Harrisburg, PA

 

Jan-14

    2,550       -       -       2,550       -  

Crossroads Plaza

 

Cary, NC

 

Feb-14

    18,691       72,309       -       91,000       489  

Quail Corners

 

Charlotte, NC (2)

 

Mar-14

    9,398       17,409       4,943       31,750       110  

KIF 1 Portfolio (12 properties)

 

Various (3)

 

Apr-14

    128,699       157,010       122,291       408,000       1,589  

Fountain at Arbor Lakes (2 Land Parcels)

 

Maple Grove, MN

 

Apr-14

    900       -       -       900       -  

Boston Portfolio (24 properties)

 

Various

 

Apr-14

    149,486       120,514       -       270,000       1,426  

Vinnin Square

 

Swampscott, MA

 

May-14

    2,550       -       -       2,550       6  

SEB Portfolio (10 Properties)

 

Various (4)

 

Jul-14

    69,261       193,600       12,911       275,772       1,415  

Highlands Ranch Parcel

 

Highlands Ranch, CO

 

Sep-14

    3,800       -       -       3,800       10  
            $ 450,574     $ 584,111     $ 147,787     $ 1,182,472       5,361  

* Includes 1031 sales proceeds


** Gross leasable area ("GLA")


 

(1)

The Company acquired three properties from a joint venture in which the Company has an 11% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as such recognized a gain of $3.7 million from the fair value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase price above in Other.


 

(2)

The Company acquired a 65.4% controlling ownership interest in this property and the seller retained a 34.6% noncontrolling interest in the property. The partner has the ability to put its partnership interest to the Company. As such, the Company has recorded the partners’ share of the property’s fair value of $4.9 million as Redeemable noncontrolling interests on the Company’s Condensed Consolidated Balance Sheets.


 

(3)

The Company acquired from its partners the remaining ownership interest in a joint venture which holds 12 encumbered properties for which the Company had a 39.1% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a result, recognized a gain of $65.6 million from the fair value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase price above in Other. Subsequently, the Company repaid $128.4 million in debt encumbering ten of the properties. Additionally, during June 2014, the Company sold one of the properties to a third party.


 

(4)

The Company acquired from its partner the remaining ownership interest in 10 properties that were held in a joint venture in which the Company has a 15% noncontrolling interest. The Company evaluated this transaction pursuant to the FASB’s Consolidation guidance and as a result, recognized a gain of $14.4 million from the fair value adjustment associated with the Company’s original ownership due to a change in control, which is reflected in the purchase price above in Other.


The aggregate purchase price of the properties acquired during the nine months ended September 30, 2014, has been preliminarily allocated as follows (in thousands): 


Land

  $ 335,891  

Buildings

    561,601  

Above Market Rents

    24,995  

Below Market Rents

    (67,101 )

In-Place Leases

    93,617  

Building Improvements

    239,897  

Tenant Improvements

    21,885  

Mortgage Fair Value Adjustment

    (34,154 )

Other Assets

    5,841  
    $ 1,182,472  

Dispositions –


During the nine months ended September 30, 2014, the Company disposed of 37 operating properties, in separate transactions, for an aggregate sales price of $458.1 million, including seven operating properties in Mexico. These transactions, which are included in Discontinued Operations on the Company’s Condensed Consolidated Statements of Income, resulted in an aggregate gain of $129.4 million, before income taxes and noncontrolling interests and aggregate impairment charges of $12.1 million, before income taxes and noncontrolling interests.


Impairment Charges -


During the nine months ended September 30, 2014, the Company recognized aggregate impairment charges of $45.7 million, which are included in Impairment charges under Operating expenses on the Company’s Condensed Consolidated Statements of Income. These impairment charges consist of $40.9 million related to adjustments to property carrying values and $4.8 million related to a cost method investment. The adjustments to property carrying values were recognized in connection with the Company’s efforts to market certain properties and management’s assessment as to the likelihood and timing of such potential transactions and the anticipated hold period for such properties. During the second quarter of 2014, the Company implemented a plan to accelerate its disposition of certain U.S. properties and in accordance with this strategy the Company identified approximately 150 operating properties to sell within the next 18 months. This plan effectively shortened the Company’s anticipated hold period for these properties and as a result the Company recognized impairment charges on certain consolidated operating properties. (See Footnote 12 for fair value disclosure).


During the nine months ended September 30, 2013, the Company recognized aggregate impairment charges of $83.9 million, which are included in Impairment charges under Operating expenses on the Company’s Condensed Consolidated Statements of Income. These impairment charges consist of $73.9 million related to adjustments to property carrying values and $10.0 million relating to a cost method investment.


The Company’s estimated fair values as it relates to property carrying values were primarily based upon estimated sales prices from third party offers based on signed contracts or letters of intent. The impairment of the cost method investment was based upon a review of the underlying cause of the decline in value, as well as the severity and duration of the decline. As a result of such review, the Company determined that the decline was deemed to be other-than-temporary. (See Footnote 12 for fair value disclosure).