| Properties, Net |
Properties, Net
Operating properties, net consisted of the following (in thousands):
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|
September 30,
2017 |
|
December 31,
2016 |
Land |
$ |
440,771 |
|
|
$ |
433,311 |
|
Buildings and improvements |
3,009,203 |
|
|
2,944,905 |
|
Less: Accumulated depreciation |
(759,262 |
) |
|
(706,385 |
) |
Operating properties, net |
$ |
2,690,712 |
|
|
$ |
2,671,831 |
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Projects in development or held for future development consisted of the following (in thousands):
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September 30,
2017 |
|
December 31,
2016 |
Land |
$ |
216,108 |
|
|
$ |
195,521 |
|
Development in progress, excluding land |
190,211 |
|
|
206,010 |
|
Projects in development or held for future development |
$ |
406,319 |
|
|
$ |
401,531 |
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Our properties held for sale included:
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• |
as of September 30, 2017: two operating properties in our Data Center Shells sub-segment and one in our Fort Meade/BW Corridor sub-segment; and
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• |
as of December 31, 2016: eight operating properties in White Marsh (included primarily in our Regional Office segment); one operating property in our Northern Virginia Defense/IT sub-segment; and land in White Marsh and Northern Virginia.
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The table below sets forth the components of assets held for sale on our consolidated balance sheet for these properties (in thousands):
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September 30, 2017 |
|
December 31, 2016 |
Properties, net |
$ |
68,081 |
|
|
$ |
85,402 |
|
Deferred rent receivable |
5,582 |
|
|
4,241 |
|
Intangible assets on real estate acquisitions, net |
— |
|
|
338 |
|
Deferred leasing costs, net |
742 |
|
|
3,636 |
|
Lease incentives, net |
10 |
|
|
1,037 |
|
Assets held for sale, net |
$ |
74,415 |
|
|
$ |
94,654 |
|
2017 Dispositions
During the nine months ended September 30, 2017, we sold the following operating properties (dollars in thousands):
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Project Name |
|
City, State |
|
Segment |
|
Date of Sale |
|
Number of Buildings |
|
Total Rentable Square Feet |
|
Transaction Value |
|
Gain on Sale |
3120 Fairview Park Drive |
|
Falls Church, VA |
|
Northern Virginia Defense/IT |
|
2/15/2017 |
|
1 |
|
|
190,000 |
|
|
$ |
39,000 |
|
|
$ |
— |
|
1334 Ashton Road |
|
Hanover, MD |
|
Fort Meade/BW Corridor |
|
6/9/2017 |
|
1 |
|
|
37,000 |
|
|
2,300 |
|
|
— |
|
Remaining White Marsh Properties (1) |
|
White Marsh, MD |
|
Regional Office and Other |
|
7/28/2017 |
|
8 |
|
|
412,000 |
|
|
47,500 |
|
|
1,180 |
|
Dispositions through 9/30/2017 |
|
|
|
10 |
|
|
639,000 |
|
|
$ |
88,800 |
|
|
$ |
1,180 |
|
(1) This sale also included land.
We also sold other land in the nine months ended September 30, 2017 for $14.3 million and recognized a gain on sale of $4.2 million.
On October 27, 2017, we sold:
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• |
201 Technology Drive, an operating property totaling 103,000 square feet in Lebanon, Virginia (in our Data Center Shells sub-segment), for $29.2 million; and
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• |
11751 Meadowville Lane, an operating property totaling 193,000 square feet in Chester, Virginia (in our Data Center Shells sub-segment), for $44.3 million. We provided a financial guaranty to the buyer under which we would indemnify it for up to $20 million in losses it could incur related to a potential defined capital event occurring on the property by June 30, 2019. Accordingly, we will not recognize the sale of this property for accounting purposes, and will reflect the sale price of the property as a liability, until the guaranty expires. We do not expect to incur any losses under this financial guaranty.
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2017 Construction Activities
During the nine months ended September 30, 2017, we placed into service 751,000 square feet in five newly constructed properties (including a partially operational property) and 88,000 square feet in three redeveloped properties (including a partially operational property). As of September 30, 2017, we had eight office properties under construction, or for which we were contractually committed to construct, that we estimate will total 1.1 million square feet upon completion (including two properties completed but held for future lease to the United States Government) and two office properties under redevelopment that we estimate will total 36,000 square feet upon completion.
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