Quarterly report pursuant to Section 13 or 15(d)

Properties, net

v2.4.1.9
Properties, net
 3 Months Ended
Mar. 31, 2015
Real Estate [Abstract]  
Properties, net
Properties, Net
 
Operating properties, net consisted of the following (in thousands): 
 
March 31,
2015
 
December 31,
2014
Land
$
455,639

 
$
439,355

Buildings and improvements
3,157,434

 
3,015,216

Less: Accumulated depreciation
(724,539
)
 
(703,083
)
Operating properties, net
$
2,888,534

 
$
2,751,488



During the three months ended March 31, 2014, we recognized $12.9 million in additional depreciation expense resulting from our revision of the useful life of a property in Greater Philadelphia, Pennsylvania (“Greater Philadelphia”) that was removed from service for redevelopment.
 
Projects in development or held for future development consisted of the following (in thousands):
 
March 31,
2015
 
December 31,
2014
Land
$
219,852

 
$
214,977

Construction in progress, excluding land
269,766

 
330,449

Projects in development or held for future development
$
489,618

 
$
545,426



As of December 31, 2014, we had two land parcels in the Greater Baltimore region classified as held for sale with a cost basis of $14.3 million that were sold during the three months ended March 31, 2015.

2015 Acquisition

On March 19, 2015, we acquired 250 W. Pratt Street, a 367,000 square foot office property in Baltimore, Maryland that was 96.2% leased, for $61.9 million. The table below sets forth the allocation of the acquisition costs of this property (in thousands):

Land, operating properties
 
$
8,057

Building and improvements
 
34,740

Intangible assets on real estate acquisitions
 
20,183

Total assets
 
62,980

Below-market leases
 
(1,093
)
Total acquisition cost
 
$
61,887



Intangible assets recorded in connection with the above acquisition included the following (dollars in thousands):
 
 
 
 Weighted Average Amortization Period (in Years)
Tenant relationship value
$
7,252

 
11
In-place lease value
10,218

 
7
Above-market leases
2,713

 
4
 
$
20,183

 
8

We expensed $1.0 million in operating property acquisition costs during the three months ended March 31, 2015 that are included in business development expenses and land carry costs on our consolidated statements of operations.

2015 Dispositions

We sold land in the three months ended March 31, 2015 for $18.1 million and recognized gains of $4.0 million on the sales.

2015 Construction Activities

During the three months ended March 31, 2015, we placed into service an aggregate of 440,000 square feet in three newly constructed office properties located in Northern Virginia and San Antonio, Texas (“San Antonio”), and 111,000 square feet of a property undergoing redevelopment in Greater Philadelphia. As of March 31, 2015, we had seven 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 four in Northern Virginia, two in the Baltimore/Washington Corridor and one in Huntsville, Alabama (“Huntsville”). We also had five office properties under redevelopment (including one partially operational property) that we estimate will total 344,000 square feet upon completion, including three in the Baltimore/Washington Corridor, one in Greater Philadelphia and one in St. Mary’s County, Maryland.