Quarterly report pursuant to Section 13 or 15(d)

Properties, net

v2.4.0.6
Properties, net
 6 Months Ended
Jun. 30, 2012
Real Estate [Abstract]  
Properties, net
Properties, net
 
Operating properties, net consisted of the following (in thousands):
 
 
June 30,
2012
 
December 31,
2011
Land
$
443,319

 
$
472,483

Buildings and improvements
2,748,162

 
2,801,252

Less: accumulated depreciation
(562,345
)
 
(559,679
)
Operating properties, net
$
2,629,136

 
$
2,714,056


 
Projects we had in development or held for future development consisted of the following (in thousands):
 
 
June 30,
2012
 
December 31,
2011
Land
$
222,577

 
$
229,833

Construction in progress, excluding land
380,879

 
409,086

Projects in development or held for future development
$
603,456

 
$
638,919


 
Dispositions and Impairments
 
We sold the following operating properties during the six months ended June 30, 2012 (dollars in thousands):
Project Name
 
Location
 
Date of Sale
 
Number of Buildings
 
Total Rentable Square Feet
 
Sale Price
 
Gain on Sale
White Marsh Portfolio (1)
 
White Marsh, Maryland
 
1/30/2012
 
5

 
163,000

 
$
19,100

 
$
2,445

1101 Sentry Gateway
 
San Antonio, Texas
 
1/31/2012
 
1

 
95,000

 
13,500

 
1,747

222 and 224 Schilling Circle
 
Hunt Valley, Maryland
 
2/10/2012
 
2

 
56,000

 
4,400

 
102

15 and 45 West Gude Drive
 
Rockville, Maryland
 
5/2/2012
 
2

 
231,000

 
49,107

 
—

11800 Tech Road
 
Silver Spring, Maryland
 
6/14/2012
 
1

 
240,000

 
21,300

 
—

 
 
 
 
 
 
11

 
785,000

 
$
107,407

 
$
4,294


(1) Includes three properties comprising the White Marsh Professional Center, 8615 Ridgely’s Choice and 8114 Sandpiper Circle.
 
We also sold non-operating properties during the six months ended June 30, 2012 for aggregate sale prices totaling $26.8 million; in addition to the gain on sales reflected above, we also recognized impairment losses on certain of these sales that are disclosed below.
 
As discussed in our 2011 Annual Report on Form 10-K, we implemented a plan in 2011 to dispose of office properties and land that are no longer closely aligned with our strategy (the “Strategic Reallocation Plan”).  During the six months ended June 30, 2012, we recognized aggregate net impairment losses in connection with the Strategic Reallocation Plan of $8.9 million ($11.2 million classified as discontinued operations and including $1.2 million in exit costs).  Approximately $5.1 million of these losses related to our expected disposition of an additional property. The expected cash flows from the resulting shortened holding period for this property are not sufficient to recover its carrying value. The table below sets forth the impairment losses recognized in the six months ended June 30, 2012 by period of recognition and by property classification (in thousands):
 
Three Months Ended
 
June 30, 2012
 
March 31, 2012
 
Total
Operating properties
$
2,354

 
$
11,833

 
$
14,187

Non-operating properties
—

 
(5,246
)
 
(5,246
)
Total
$
2,354

 
$
6,587

 
$
8,941



2012 Construction Activities

As of June 30, 2012, we had construction underway on eight office properties that we estimate will total 988,000 square feet upon completion, including four in the Baltimore/Washington Corridor, two in Huntsville, Alabama, one in Greater Baltimore and one in Northern Virginia, and redevelopment underway on one office property in Greater Philadelphia that we estimate will total 113,000 square feet upon completion.