Accounting for the Impairment or Disposal of Long-Lived Assets

The operating results and gain/(loss) on disposition of real estate for properties sold and held for sale are reflected in the consolidated statements of operations as discontinued operations. Prior period financial statements have been adjusted for discontinued operations. The proceeds from dispositions of operating properties with no continuing involvement for the three and nine months ended September 30, 2011 were $70.6 million and $340.2 million, respectively, as compared to $3.2 million and $17.5 million, respectively, for the same periods in 2010.

Below is a summary of the results of operations for the properties held for sale and disposed of through the respective disposition dates (in thousands):



	For the Three Months Ended						For the Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Revenues	$	1,941		$	14,206		$	22,652		$	43,128
Operating expenses	(467		)	(4,953		)	(8,471		)	(15,679		)
Interest expense	(338		)	(2,564		)	(3,544		)	(8,868		)
Depreciation and amortization	(288		)	(3,251		)	(4,150		)	(11,128		)
Income before property dispositions	$	848		$	3,438		$	6,487		$	7,453

Three properties totaling 484,000 square feet in the Company’s South reportable segment were considered to be held for sale as of September 30, 2011.

Interest expense is allocated to discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of net assets sold and held for sale (without continuing involvement) to the sum of total net assets plus consolidated debt.

Asset Impairment

During the three months ended September 30, 2011, the Company recognized no impairments. During the nine months ended September 30, 2011, the Company recognized $4.7 million in impairment charges related to properties in the Central reportable segment that were sold. These impairments are included in discontinued operations in the Company’s consolidated statements of operations. The Company determined these impairments through a comparison of the aggregate future cash flows (including quoted offer prices, a Level I input according to the fair value hierarchy established by the FASB in Topic 820, “Fair Value Measurements and Disclosures”) to be generated by the property to the carrying value of the properties. The Company has evaluated each of the properties and land held for development and has determined that there are no additional valuation adjustments necessary at September 30, 2011. During the three and nine months ended September 30, 2010, the Company recognized impairment charges of $782,000 and $1.2 million, respectively. For the three months ended September 30, 2010, $443,000 in impairment related to a property in the Central reportable segment, $201,000 related to a property in the South reportable segment and $138,000 related to a portfolio of properties in the Metro reportable segment. For the nine months ended September 30, 2010, $443,000 in impairment related to a property in the Central reportable segment, $201,000 related to a property in the South reportable segment and $538,000 related to a portfolio of properties in the Metro reportable segment.