| Discontinued Operations |
7. DISCONTINUED OPERATIONS
On January 1, 2014, the Company early adopted the new discontinued operations accounting standard and as the properties sold during the year ended December 31, 2014 did not represent a strategic shift (as the Company is not entirely exiting markets or property types), they have not been reflected as part of discontinued operations. See Note 3: Real Estate Transactions – Sales.
During the year ended December 31, 2013, the Company disposed of 24 office properties located in New York, New Jersey, Pennsylvania and Connecticut aggregating 3 million square feet and three developable land parcels for total net sales proceeds of approximately $390.6 million. The Company has presented these properties as discontinued operations in its statements of operations for all periods presented. See Note 3: Real Estate Transactions – Sales.
During the year ended December 31, 2012, as the Company disposed of 2200 Renaissance Boulevard in King of Prussia, Pennsylvania; 95 Chestnut Ridge Road in Montvale, New Jersey; and three office buildings in Moorestown, New Jersey, the Company has presented these properties as discontinued operations in its statements of operations for all periods presented.
The following table summarizes income from discontinued operations and the related realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, for the years ended December 31, 2013 and 2012: (dollars in thousands)
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Year Ended December 31,
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2013
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2012
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Total revenues
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$
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33,601
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$
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66,882
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Operating and other expenses
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(13,454)
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(26,484)
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Depreciation and amortization
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(8,218)
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(17,765)
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Interest expense
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(118)
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(755)
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Income from discontinued operations
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11,811
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21,878
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Loss from early extinguishment of debt
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(703)
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-
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Impairments (1)
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(23,851)
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(8,400)
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Unrealized losses on disposition of rental property (2)
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-
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(9,213)
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Realized gains on disposition of rental property
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83,371
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4,438
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Realized gains (losses) and unrealized losses on
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disposition of rental property and impairments, net
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59,520
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(13,175)
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Total discontinued operations, net
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$
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70,628
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$
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8,703
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(1)Represents impairment charges recorded on certain properties prior to their sale.
(2)Represents valuation allowances on properties identified as held for sale in 2012, as follows:
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(i)
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At March 31, 2012, the Company identified as held for sale its 47,700 square foot office building located at 95 Chestnut Ridge Road in Montvale, New Jersey. The Company determined that the carrying amount of this property was not expected to be recovered from estimated net sales proceeds and, accordingly, recognized a valuation allowance of $0.5 million at March 31, 2012. On July 25, 2012, the Company sold the building for approximately $4.0 million (with no gain from the sale).
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(ii)
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At March 31, 2012, the Company identified as held for sale three office buildings totaling 222,258 square feet in Moorestown, New Jersey. The Company determined that the aggregate carrying amount of these properties was not expected to be recovered from estimated net sales proceeds and, accordingly, recognized a valuation allowance of $1.6 million at June 30, 2012. On November 7, 2012, the Company sold the buildings for approximately $19.4 million and recognized a loss of approximately $0.1 million from the sale.
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(iii)
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At December 31, 2012, the Company identified as held for sale its 248,400 square foot office building located at 19 Skyline Drive in Hawthorne, New York. The Company determined that the carrying amount of this property was not expected to be recovered from estimated sales proceeds and accordingly recognized a valuation allowance of $7.1 million at December 31, 2012. Also at December 31, 2012, the Company identified as held for sale its 204,057 square foot office building located at 55 Corporate Drive in Bridgewater, New Jersey. The two properties held for sale at December 31, 2012 carried an aggregate book value of $60.9 million, net of accumulated depreciation of $16.8 million and a valuation allowance of $7.1 million. As of April 10, 2013, the Company sold 19 Skyline Drive for approximately $16.1 million and recognized a gain of approximately $0.1 million. As of April 26, 2013, the Company sold 55 Corporate Drive for approximately $71 million and recognized a gain of approximately $19.7 million.
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