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ACQUISITION OF REAL ESTATE AND DISCONTINUED OPERATIONS
6 Months Ended
Jun. 30, 2014
ACQUISITION AND DISPOSITION OF REAL ESTATE AND DISCONTINUED OPERATIONS ABSTRACT  
ACQUISITION OF REAL ESTATE AND DISCONTINUED OPERATIONS
ACQUISITION OF REAL ESTATE AND DISCONTINUED OPERATIONS

Acquisitions

During 2014, the Company acquired the following properties through its Core Portfolio and Fund IV as follows:

Core Portfolio

(dollars in millions)
 
 
 
 
 
 
Property
GLA

Percent Owned

Type
Month of Acquisition
Purchase Price

Location
11 E Walton
6,738

100
%
Street Retail
January
$
44.0

Chicago, IL
61 Main Street
3,400

100
%
Street Retail
February
7.3

Westport, CT
865 W North Avenue
16,000

100
%
Street Retail
March
14.8

Chicago, IL
252-256 Greenwich Avenue
9,172

100
%
Street Retail
March
24.5

Greenwich, CT
152-154 Spring Street
2,936

90
%
Street Retail
April
38.0

New York, NY
2520 Flatbush Avenue
29,114

100
%
Urban Retail
May
17.1

Brooklyn, NY
Total
67,360

 
 
 
$
145.7

 


The Company expensed $1.5 million of acquisition costs for the six months ended June 30, 2014, related to the Core Portfolio.

4.    ACQUISITION OF REAL ESTATE AND DISCONTINUED OPERATIONS (continued)

Acquisitions (continued)

Fund IV

(dollars in millions)
 
 
 
 
 
 
Property
GLA

Percent Owned

Type
Month of Acquisition
Purchase Price

Location
Broughton Street Portfolio (18 Properties)
157,383

50
%
Street Retail
Various
$
26.0

Savannah, GA
Total
157,383

 
 
 
$
26.0

 


The Company expensed $2.5 million of acquisition costs for the six months ended June 30, 2014, related to Fund IV.

Purchase Price Allocations

The above acquisitions have been accounted for as business combinations. The purchase prices were allocated to the acquired assets and liabilities based on their estimated fair values at the dates of acquisition. The preliminary measurements of fair value reflected below are subject to change. The Company expects to finalize the valuations and complete the purchase price allocations within one year from the dates of acquisition.

The following table summarizes the Company's preliminary allocations of the purchase prices of assets acquired and liabilities assumed during 2014 which have yet to be finalized:

(dollars in thousands)
Preliminary Purchase Price Allocations
Land
$
44,027

Buildings and improvements
127,579

Total consideration
$
171,606



During 2013, the Company acquired properties and recorded the preliminary allocations of the purchase prices to the assets acquired based on provisional measurements of fair value. During 2014, the Company finalized the allocations of the purchase prices and made certain measurement period adjustments. The following table summarizes the preliminary allocations of the purchase prices of these properties as recorded as of December 31, 2013, and the finalized allocations as adjusted as of June 30, 2014:

(dollars in thousands)
Purchase Price Allocations as Originally Reported
Adjustments
Finalized Purchase Price Allocations
Land
$
41,700

$
8,236

$
49,936

Buildings and improvements
142,618

(20,640
)
121,978

Acquisition-related intangible assets (in Acquired lease intangibles, net)

15,716

15,716

Acquisition-related intangible liabilities (in Acquired lease intangibles, net)

(3,312
)
(3,312
)
Total consideration
$
184,318

$

$
184,318



4.    ACQUISITION OF REAL ESTATE AND DISCONTINUED OPERATIONS (continued)

Dispositions

During 2014, the Company disposed of the following properties:

(dollars in millions)
 
 
 
 
 
Dispositions
GLA
Sale Price
Gain/Loss on Sale
Month Sold
Owner
Walnut Hill 1
297,905

$

$
12.4

March
Core
Sheepshead Bay
96,418

20.2

1.4

April
Fund III
City Point 2

26.3

0.6

June
Fund II
Other post-sale adjustments


(0.9
)
 
 
Total
394,323

$
46.5

$
13.5

 
 

Note:

(1) This property was subject to $22.9 million of non-recourse debt and was foreclosed upon by the lender during March 2014, resulting in a $12.4 million gain.

(2) Represents the sale of a portion of the residential air rights known as "Tower 2" associated with the Company's City Point development project.

Discontinued Operations

Prior to the Company's adoption of ASU 2014-08, it reported properties held for sale or sold during the periods presented as discontinued operations. The results of discontinued operations are reflected as a separate component within the accompanying Consolidated Balance Sheets and Consolidated Statements of Income for all periods presented. As of June 30, 2014, Sheepshead Bay, a Fund III asset, which was previously reported as a discontinued operation was sold. As a result of the adoption of ASU 2014-08, the sale of operating real estate is no longer considered a discontinued operation so long as it is in the normal course of business and does not reflect a separate component of business. Therefore, the Company has no current assets or liabilities of discontinued operations.

The combined assets and liabilities and the results of operations of the properties classified as discontinued operations are summarized for each period presented as follows:

(dollars in thousands)
 
BALANCE SHEETS
December 31, 2013
ASSETS
 
Net real estate
$
17,991

Rents receivable, net
565

Deferred charges, net
38

Prepaid expenses and other assets
1,840

Total assets of discontinued operations
$
20,434

LIABILITIES
 
Accounts payable and accrued expenses
$
1,473

Other liabilities
1,034

Total liabilities of discontinued operations
$
2,507



4.    ACQUISITION OF REAL ESTATE AND DISCONTINUED OPERATIONS (continued)

 
Three Months Ended
 
Six Months Ended
(dollars in thousands) 
June 30,
 
June 30,
STATEMENT OF INCOME
2014
 
2013
 
2014
 
2013
Total revenues
$

 
$
6,033

 
$

 
$
12,213

Total expenses

 
4,852

 

 
9,408

Operating income

 
1,181

 

 
2,805

Gain on disposition of property
560

 
4,191

 
560

 
4,191

Income from discontinued operations
560

 
5,372

 
560

 
6,996

Income from discontinued operations attributable to noncontrolling interests
(461
)
 
(4,582
)
 
(461
)
 
(6,174
)
Income from discontinued operations attributable to Common Shareholders
$
99

 
$
790

 
$
99

 
$
822