Commitments and Contingencies

Environmental Matters

Substantially all of the Company's properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company or obtained by predecessor owners prior to the sale of the property or land to the Company. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

Operating Ground Lease Agreements

Future minimum rental payments under the terms of all non-cancelable operating ground leases under which the Company is the lessee, as of March 31, 2015, were as follows (in thousands):



Year	Amount
2015	$	507
2016	686
2017	686
2018	686
2019	686
2020 through 2034	6,604
Total	$	9,855

Operating ground lease expense for the three months ended March 31, 2015 was $64,000 as compared to $47,000 for the same period in 2014.

Legal Matters

From time to time, the Company is a party to a variety of legal proceedings, claims and assessments arising in the normal course of business. As of March 31, 2015 there were no legal proceedings, claims or assessments that the Company expects to have a material adverse effect on the Company’s business or financial statements.

Comcast Innovation and Technology Center

The Company has entered into two joint ventures for the purpose of developing and owning the Comcast Innovation & Technology Center (the "Project") located on the 1800 block of Arch Street in Philadelphia, Pennsylvania. The 59-story building will include 1.3 million square feet of rentable office space and a 222-room Four Seasons Hotel. Completion of the first phase of the Project is anticipated to be in the third quarter of 2017. Project costs for the development of the Project, exclusive of tenant-funded interior improvements, are anticipated to be approximately $932 million. The Company's investment in the Project is expected to be approximately $185 million with 20% ownership interests in both joint ventures.

The two joint ventures have engaged the Company as the developer of the Project pursuant to a Development Agreement by which the Company agrees, in consideration for a development fee, to be responsible for all aspects of the development of the Project and to guarantee the timely lien-free completion of construction of the Project and the payment, subject to certain exceptions, of any cost overruns incurred in the development of the Project.

Other

As of March 31, 2015, the Company had letter of credit obligations of $4.2 million. The Company believes that the likelihood is remote that there will be a draw upon these letter of credit obligations.

As of March 31, 2015, the Company had 21 buildings under development. These buildings are expected to contain, when completed, a total of 3.8 million square feet of leasable space and represent an anticipated aggregate investment of $412.9 million. At March 31, 2015, development in progress totaled $269.5 million. In addition, as of March 31, 2015, the Company had invested $8.0 million in deferred leasing costs related to these development buildings. In addition, the Company had signed commitments for build-to-suit developments not yet commenced for an anticipated aggregate investment of $167.0 million.

As of March 31, 2015, the Company was committed to $14.8 million in improvements on certain buildings and land parcels.

As of March 31, 2015, the Company was committed to $51.0 million in future land purchases.

As of March 31, 2015, the Company was obligated to pay for tenant improvements not yet completed for a maximum of $41.5 million.

The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.