On September 9, 2015, we completed the sale of 1750 Pennsylvania Avenue, NW, a 278,000 square foot office building in Washington, DC for $182,000,000, resulting in a net gain of approximately $102,000,000 which is included in “net gain on disposition of wholly owned and partially owned assets” on our consolidated statement of income. The tax gain of approximately $137,000,000 was deferred as part of a like-kind exchange. We are managing the property on behalf of the new owner.

On January 15, 2015, we completed the spin-off of substantially all of our retail segment comprised of 79 strip shopping centers, three malls, a warehouse park and $225,000,000 of cash to UE (NYSE: UE) (see Note 1 – Organization). In addition, we completed the following retail property sales, substantially completing the exit of the retail strips and malls business.

On March 13, 2015, we sold our Geary Street, CA lease for $34,189,000, which resulted in a net gain of $21,376,000.

On March 31, 2015, we transferred the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to PREIT (see Note 7 – Investments in Partially Owned Entities). The financial statement gain was $7,823,000, of which $7,192,000 was recognized in the first quarter of 2015 and the remaining $631,000 was deferred based on our ownership interest in PREIT. On March 31, 2018, we will be entitled to additional consideration of 50% of the increase in the value of Springfield Town Center, if any, over $465,000,000, calculated utilizing a 5.5% capitalization rate. In the first quarter of 2014, we recorded a non-cash impairment loss of $20,000,000 on Springfield Town Center which is included in “income from discontinued operations” on our consolidated statements of income.

On August 6, 2015, we sold our 50% interest in the Monmouth Mall in Eatontown, NJ to our joint venture partner for $38,000,000, valuing the property at approximately $229,000,000, which resulted in a net gain of $33,153,000.

We also sold five residual retail properties, in separate transactions, for an aggregate of $10,731,000, which resulted in net gains of $3,675,000.

We have reclassified the revenues and expenses of the UE portfolio and other retail properties discussed above 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 consolidated financial statements. The net gains resulting from the sale of these properties are included in “income from discontinued operations” on our consolidated statements of income. The tables below set forth the assets and liabilities related to discontinued operations at September 30, 2015 and December 31, 2014 and their combined results of operations and cash flows for the nine months ended September 30, 2015 and 2014.

(Amounts in thousands)					Balance as of
					September 30, 2015		December 31, 2014
Assets related to discontinued operations:
Real estate, net					$	27,560	$	2,028,677
Other assets						7,582		215,804
					$	35,142	$	2,244,481

Liabilities related to discontinued operations:
Mortgages payable					$	-	$	1,288,535
Other liabilities (primarily deferred revenue in 2014)						11,520		222,827
					$	11,520	$	1,511,362


(Amounts in thousands)	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Income from discontinued operations:
Total revenues	$	2,589	$	93,440	$	24,868	$	297,039
Total expenses		1,279		62,715		16,672		204,619
		1,310		30,725		8,196		92,420
Net gain on sale of our interest in Monmouth Mall		33,153		-		33,153		-
Net gains on sale of real estate		-		57,796		10,867		57,796
Transaction related costs (primarily UE spin off)		-		(5,828)		(22,972)		(9,343)
Net gain on sale of lease position in Geary Street, CA		-		-		21,376		-
Impairment losses		-		-		(256)		(20,842)
Pretax income from discontinued operations		34,463		82,693		50,364		120,031
Income tax expense		-		(525)		(86)		(1,575)
Income from discontinued operations	$	34,463	$	82,168	$	50,278	$	118,456


Cash flows related to discontinued operations:
Cash flows from operating activities					$	(34,490)	$	153,815
Cash flows from investing activities						348,697		(122,247)