Operating Property Activities

Acquisitions of Operating Real Estate -

During the

nine

months ended

September 30, 2017,

the Company acquired the following operating properties, in separate transactions, through direct asset purchases or consolidation due to change in control resulting from the purchase of additional interests or obtaining control through the modification of a joint venture investment:

			Purchase Price (in thousands)
Property Name	Location	Month Acquired / Consolidated	Cash *		Debt		Other Consideration * *		Total		GLA* * *
Plantation Commons	Plantation, FL (1)(3)	Jan-17	$	-	$	-	$	12,300	$	12,300		60
Gordon Plaza	Woodbridge, VA (1)(3)	Jan-17		-		-		3,100		3,100		184
Plaza del Prado	Glenview, IL	Jan-17		39,063		-		-		39,063		142
Columbia Crossing Parcel	Columbia Crossing, MD	Jan-17		5,100		-		-		5,100		25
The District at Tustin Legacy	Tustin, CA (2)(3)	Apr-17		-		206,000		98,698		304,698		688
Jantzen Beach Center	Portland, OR	Jul-17		131,927		-		-		131,927		722
Del Monte Plaza Parcel	Re no, NV	Jul-17		24,152		-		-		24,152		83
Gateway Station Phase II	Burleson, TX	Aug-17		15,355		-		-		15,355		79
Jantzen Beach Center Parcel	Portland, OR	Sep-17		6,279		-		-		6,279		25
Webster Square Outparcel	Nashua, NH	Sep-17		4,985		-		-		4,985		22
			$	226,861	$	206,000	$	114,098	$	546,959		2,030

* The Company utilized an aggregate

$115.9

million associated with Internal Revenue Code

§1031

sales proceeds.

* Includes the Company’s previously held equity interest investment.

** Gross leasable area ("GLA")

(

)

The Company acquired from its partners

, their ownership interest in properties that were held in joint ventures in which the Company had noncontrolling interests. The Company now has a controlling interest in these properties and has deemed these entities to be VIEs for which the Company is the primary beneficiary and now consolidates these assets.

(

)

Effective

April 1, 2017,

the Company and its partner amended its joint venture agreement relating to the Company

’s investment in this property. As a result of this amendment, the Company now controls the entity and consolidates the property. This entity is deemed to be a VIE for which the Company is the primary beneficiary.

(

)

The Company evaluated these transactions pursuant to the FASB

’s Consolidation guidance and as a result, recognized gains on change in control of interests resulting from the fair value adjustments associated with the Company’s previously held equity interests, which are included in the purchase price above in Other Consideration. The Company’s current ownership interests and gains on change in control of interests recognized as a result of these transactions are as follows (in thousands):

Property Name	Current Ownership Interest		Gain on change in control of interests
Plantation Commons		76.25%	$	9,793
Gordon Plaza		40.62%		395
The District at Tustin Legacy	(a)			60,972
			$	71,160

(a)

The Company

’s share of this investment is subject to change as a result of a waterfall computation which is dependent upon property cash flows (

54.27%

as of date of consolidation).

Included in the Company

’s Condensed Consolidated Statements of Operations are

$17.8

million and

$12.1

million in revenues from rental properties from the date of acquisition through

September 30, 2017

and

2016,

respectively, for operating properties acquired during each of the respective years.

The Company adopted ASU

2017

effective

January 1, 2017

and applied the guidance to its operating property acquisitions

during the

nine

months ended

September 30, 2017.

The purchase price for these acquisitions is allocated to real estate and related intangible assets acquired and liabilities assumed, as applicable, in accordance with our accounting policies for asset acquisitions.

The

purchase price allocations for properties acquired/consolidated during the

nine

months ended

September 30, 2017,

are as follows (in thousands):

Land	$	190,226
Buildings		293,355
Above-market leases		11,992
Below-market leases		(30,246	)
In-place leases		42,412
Building improvements		30,917
Tenant improvements		12,737
Mortgage fair value adjustment		(6,222	)
Other assets		5,090
Other liabilities		(3,302	)
Net assets acquired	$	546,959

As of

September 30, 2017,

the allocation adjustments and revised allocations for properties accounted for as business combinations during the year ended

December 31, 2016,

are as follows (in thousands):

	Allocation as of December 31, 2016			Allocation Adjustments			Revised Allocation as of September 30, 2017
Land	$	179,150		$	(5,150	)	$	174,000
Buildings		309,493			(30,696	)		278,797
Above-market leases		11,982			885			12,867
Below-market leases		(31,903	)		(4,716	)		(36,619	)
In-place leases		44,094			(1,063	)		43,031
Building improvements		124,105			41,895			166,000
Tenant improvements		12,788			(1,155	)		11,633
Mortgage fair value adjustment		(4,292	)		-			(4,292	)
Other assets		234			-			234
Other liabilities		(27	)		-			(27	)
Net assets acquired	$	645,624		$	-		$	645,624

Dispositions

and Assets Held for Sale

–

During the

nine

months ended

September 30, 2017,

the Company disposed of

consolidated operating properties and

eight

parcels, in separate transactions, for an aggregate sales price of

$230.2

million. These transactions resulted in (i) an aggregate gain of

$62.1

million and (ii) aggregate impairment charges of

$13.0

million.

September 30, 2017,

the Company had

one

property classified as held-for-sale at a carrying amount of

$14.9

million, net of accumulated depreciation of

$2.9

million, which is included in Other assets on the Company’s Condensed Consolidated Balance Sheets. The Company’s determination of the fair value of the property was based upon an executed contract of sale with a

third

party.

Impairments

–

During the

nine

months ended

September 30, 2017,

the Company recognized aggregate impairment charges of

$34.3

million. These impairment charges consist of (i)

$13.0

million related to the sale of certain operating properties, as discussed above, (ii)

$5.1

million related to adjustments to property carrying values for properties which the Company has marketed for sale as part of its active capital recycling program and as such has adjusted the anticipated hold periods for such properties and (iii)

$16.2

million related to a property for which the Company has re-evaluated its long-term plan for the property due to unfavorable local market conditions. The Company’s estimated fair values of these properties were primarily based upon estimated sales prices from (i) signed contracts or letters of intent from

third

party offers or (ii) a discounted cash flow model. See Footnote

for fair value disclosure.

Hurricane Impact

–

The impact of Hurricanes Harvey, which hit Texas on

August 25, 2017,

and Irma, which hit Florida on

September 10, 2017,

resulted in minimal damage to the Company

’s properties located in Texas and Florida.

With respect to Hurricane Maria, which hit the island of Puerto Rico on

September 20, 2017,

the Company is currently assessing damages at its

seven

operating properties located throughout Puerto Rico, aggregating

2.2

million square feet of GLA. Two of the

se operating properties, located in the southern region of the island were less impacted and most tenants have resumed operations, while the remaining

five

operating properties in the northern region sustained varying amounts of damage. Initial repairs are in progress, however, a final assessment and recovery plan will require additional time. The Company maintains a comprehensive property insurance policy on these properties with total coverage of up to

$62.0

million, as well as business interruption insurance with coverage up to

$39.3

million in the aggregate, subject to a collective deductible of

$1.2

million. The Company anticipates that all damages and any loss of operations sustained will be covered under these existing policies. As further detailed information becomes available, the Company expects to recognize a charge, which it believes will

not

have a material effect on the Company’s financial position and/or results of operations. This charge will result from the write-down of the undepreciated portion of the property that has been permanently damaged, which would be less than the replacement costs and offset by insurance proceeds received by the Company.