Discontinued Operations

9 Months Ended

Sep. 30, 2012

Discontinued Operations [Abstract]

Discontinued Operations

8. Discontinued Operations

2012 Activity:

During 2012, we sold or have entered into agreements to sell (i) five Mart properties, (ii) four Washington, DC properties, (iii) 13non-core strip shopping centers and the Green Acres Mall, for an aggregate of $1,500,000,000. Below are the details of these transactions.

Merchandise Mart Properties

On January 6, 2012, we completed the sale of 350 West Mart Center, a 1.2 million square foot office building in Chicago, Illinois, for $228,000,000 in cash, which resulted in a net gain of $54,911,000.

On June 22, 2012, we completed the sale of L.A. Mart, a 784,000 square foot showroom building in Los Angeles, California for $53,000,000, of which $18,000,000 was cash and $35,000,000 was nine-month seller financing at 6.0%.

On July 5, 2012, we entered into agreements to sell the Washington Design Center, the Boston Design Center and the Canadian Trade Shows, for an aggregate of $175,000,000 in cash. The sales of the Canadian Trade Shows and the Washington Design Center were completed in July 2012 and the sale of the Canadian Trade Shows resulted in an after-tax net gain of $19,657,000. The sale of the Boston Design Centerwill result in a net gain of approximately $5,300,000 and is expected to be completed in the fourth quarter, subject to customary closing conditions.

Washington, DC Properties

On July 26, 2012, we completed the sale of 409 Third Street S.W., a 409,000 square foot office building in Washington, DC, for $200,000,000 in cash, which resulted in a net gain of $126,621,000. This building is contiguous to the Washington Design Center and was sold to the same purchaser.

On October 26, 2012, we entered into an agreement to sell three office buildings (“Reston Executive”) located in suburban Fairfax County, Virginia, containing 494,000 square feet for $126,000,000, which will result in a net gain of approximately $35,000,000. The sale, which is subject to customary closing conditions, is expected to be completed in the fourth quarter.

Retail Properties

In 2012, we sold 12non-core strip shopping centers in separate transactions, for an aggregate of $157,000,000 in cash, which resulted in a net gain aggregating $22,266,000, of which $4,464,000 was recognized in the third quarter. In addition we have entered into an agreement to sell a building on Market Street, Philadelphia, which is part of the Gallery at Market Eastfor $60,000,000, which will result in a net gain of approximately $35,000,000. The sale, which is subject to customary closing conditions, is expected to be completed in the fourth quarter.

On October 21, 2012, we entered into an agreement to sell the Green Acres Mall located in Valley Stream, New York, for $500,000,000. Net proceeds from the sale will be approximately $185,000,000. The financial statement gain will be approximately $195,000,000. The tax gain will be approximately $304,000,000, which is expected to be deferred as part of a like-kind exchange. The sale, which is expected to be completed in the first quarter of 2013, is subject to customary closing conditions and is conditioned on the closing of the sale of Kings Plaza (an Alexander's property), which is being sold to the same purchaser.

2011 Activity:

During 2011, we (i) completed the disposition of the High Point Complex in North Carolina, which resulted in an $83,907,000 net gain on extinguishment of debt and (ii) sold three non-core strip shopping centers and two office buildings in Washington, DC for an aggregate of $168,000,000 in cash, which resulted in a net gain aggregating $51,623,000.

8. Discontinued Operations - continued

We have reclassified the revenues and expenses of all of the properties discussed above, as well aseight other retail properties that are currently held for sale to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all of the periods presented in the accompanying financial statements.The tables below set forth the assets and liabilities related to discontinued operations at September 30, 2012 and December 31, 2011 and their combined results of operations for thethree and nine months ended September 30, 2012 and 2011.

		Assets Related to				Liabilities Related to
(Amounts in thousands)		Discontinued Operations as of				Discontinued Operations as of
		September 30,		December 31,		September 30,		December 31,
		2012		2011		2012		2011
Retail Properties		$	384,973	$	520,014	$	319,233	$	351,083
Washington, DC Properties			86,933		152,568		93,000		93,000
Merchandise Mart Properties			66,032		376,571		66,747		74,236
Total		$	537,938	$	1,049,153	$	478,980	$	518,319
		For the Three Months				For the Nine Months
(Amounts in thousands)		Ended September 30,				Ended September 30,
		2012		2011		2012		2011
Total revenues		$	27,651	$	49,656	$	112,585	$	160,747
Total expenses			21,082		41,212		81,508		130,571
			6,569		8,444		31,077		30,176
Net gains on sale of real estate			131,088		-		203,801		51,623
Gain on sale of Canadian Trade Shows, net of $11,448 of
	income taxes		19,657		-		19,657		-
Impairment losses			-		-		(13,511)		-
Net gain on extinguishment of High Point debt			-		-		-		83,907
Income from discontinued operations		$	157,314	$	8,444	$	241,024	$	165,706