Real Estate

The Company’s consolidated real estate is comprised of the following (in thousands):



	March 31, 2018			December 31, 2017

Land	$	667,847		$	658,835
Buildings and improvements	2,444,871			2,406,488
Tenant improvements	136,682			131,850
Construction in progress	21,060			18,642
Properties under capital lease	76,965			76,965
Total	3,347,425			3,292,780
Less: Accumulated depreciation	(359,048		)	(339,862		)
Operating real estate, net	2,988,377			2,952,918
Real estate under development, at cost	182,380			173,702
Net investments in real estate	$	3,170,757		$	3,126,620

Acquisitions and Conversions

During the three months ended March 31, 2018 and the year ended December 31, 2017, the Company acquired the following consolidated retail properties (dollars in thousands):



Property and Location	Percent Acquired	Date of Acquisition	Purchase Price		Debt Assumed
2018 Acquisitions
Core
Bedford Green Land Parcel	100%	Mar 23, 2018	$	1,337	$	—
Subtotal Core			1,337		—

Fund V
Trussville Promenade - Trussville, AL	100%	Feb 21, 2018	45,259		—
Subtotal Fund V			45,259		—
Total 2018 Acquisitions			$	46,596	$	—

2017 Acquisitions and Conversions
Core
Market Square Shopping Center - Wilmington, DE (Conversion) (Note 4)	100%	Nov 16, 2017	$	42,800	$	—
Subtotal Core			42,800		—

Fund IV
Lincoln Place - Fairview Heights, IL	100%	Mar 13, 2017	35,350		—
Shaw's Plaza - Windham, ME (Conversion) (Note 3)	100%	Jun 30, 2017	9,142		—
Subtotal Fund IV			44,492		—

Fund V
Plaza Santa Fe - Santa Fe, NM	100%	Jun 5, 2017	35,220		—
Hickory Ridge - Hickory, NC	100%	Jul 27, 2017	44,020		—
New Towne Plaza - Canton, MI	100%	Aug 4, 2017	26,000		—
Fairlane Green - Allen Park, MI	100%	Dec 20, 2017	62,000		—
Subtotal Fund V			167,240		—
Total 2017 Acquisitions and Conversions			$	254,532	$	—

The 2018 acquisitions were considered asset acquisitions based on accounting guidance effective as of January 1, 2018 (Note 1). However, all of the 2017 acquisitions and conversions were deemed to be business combinations. For the three months ended March 31, 2018, the Company capitalized $0.1 million of acquisition costs related to the Funds. The Company expensed $0.3 million of acquisition costs for the three months ended March 31, 2017, of which $0.2 million related to the Core Portfolio and $0.1 million related to the Funds.

Purchase Price Allocations

The purchase prices for the 2018 acquisitions and the 2017 acquisitions and conversions were allocated to the acquired assets and assumed liabilities based on their estimated fair values at the dates of acquisition. The following table summarizes the allocation of the purchase price of properties acquired during the three months ended March 31, 2018 and the year ended December 31, 2017 (in thousands):



	Three Months Ended March 31, 2018			Year Ended December 31, 2017
	Three Months Ended March 31, 2018			Year Ended December 31, 2017
Net Assets Acquired
Land	$	9,012		$	48,138
Buildings and improvements	34,064			173,576
Other assets	—			84
Acquisition-related intangible assets (in Acquired lease intangibles, net)	6,499			44,269
Acquisition-related intangible liabilities (in Acquired lease intangibles, net)	(2,979		)	(11,535		)
Net assets acquired	$	46,596		$	254,532



Consideration
Cash	$	46,171	$	200,429
Conversion of note receivable	—		41,010
Liabilities assumed	425		3,363
Existing interest in previously unconsolidated investment	—		4,159
Change in control of previously unconsolidated investment	—		5,571
Total Consideration	$	46,596	$	254,532

Dispositions

During the three months ended March 31, 2018, there were no dispositions of consolidated properties. During the year ended December 31, 2017, the Company disposed of the following consolidated properties (in thousands):



Property and Location	Owner	Date Sold	Sale Price		Gain/(Loss) on Sale
2017 Dispositions
New Hyde Park Shopping Center - New Hyde Park, NY	Fund III	Jul 6, 2017	$	22,075	$	6,433
216th Street - New York, NY	Fund II	Sep 11, 2017	30,579		6,543
City Point Condominium Tower I - Brooklyn, NY	Fund II	Oct 13, 2017	96,000		(810		)
1151 Third Avenue - New York, NY	Fund IV	Nov 16, 2017	27,000		5,183
260 E 161st Street - Bronx, NY	Fund II	Dec 13, 2017	105,684		31,537
Total 2017 Dispositions			$	281,338	$	48,886

The aggregate rental revenue, expenses and pre-tax income reported within continuing operations for the aforementioned consolidated properties that were sold during the year ended December 31, 2017 were as follows (in thousands):



	Three Months Ended March 31,
	2017
Rental revenues	$	2,840
Expenses	(4,803		)
Loss from continuing operations of disposed properties before gain on disposition of properties	(1,963		)
Net income attributable to noncontrolling interests	1,405
Net loss attributable to Acadia	$	(558	)

Properties Held For Sale

At March 31, 2018 and December 31, 2017, the Company had one property in Fund II classified as held-for-sale, Sherman Avenue, with total assets of $25.4 million. This property had a net loss of $0.1 million and $0.3 million for the three months ended March 31, 2018 and 2017, respectively.

Real Estate Under Development and Construction in Progress

Real estate under development represents the Company’s consolidated properties that have not yet been placed into service while undergoing substantial development or construction.

Development activity for the Company’s consolidated properties comprised the following during the periods presented (dollars in thousands):



	December 31, 2017			Three Months Ended March 31, 2018							March 31, 2018
	Number of Properties	Carrying Value		Transfers In		Capitalized Costs			Transfers Out		Number of Properties	Carrying Value
Core	2	$	21,897	$	—	$	2,159		$	—	2	$	24,056
Fund II	—	4,908		—		(175		)	—		—	4,733
Fund III	2	63,939		—		6,431			—		2	70,370
Fund IV	1	82,958		—		263			—		1	83,221
Total	5	$	173,702	$	—	$	8,678		$	—	5	$	182,380

During the three months ended March 31, 2018, the Company did not move any projects into or out of development. In addition to the consolidated projects noted above, the Company had one unconsolidated project remaining in development.

During the year ended December 31, 2017, the Company placed substantially all of Fund II’s City Point project into service as well as three Fund IV properties, reclassified Fund II’s Sherman Avenue property as held for sale and placed one Core property into development. In addition to the consolidated projects noted above, the Company had one unconsolidated project remaining in development after placing three of its four unconsolidated Fund IV development properties into service during the year ended December 31, 2017.

Construction in progress pertains to construction activity at the Company’s operating properties which are in service and continue to operate during the construction period.