Quarterly report pursuant to Section 13 or 15(d)

Real Estate Dispositions, Held for Sale and Impairment Charges

v3.5.0.2
Real Estate Dispositions, Held for Sale and Impairment Charges
 6 Months Ended
Jun. 30, 2016
Real Estate [Abstract]  
Real Estate Dispositions, Held for Sale and Impairment Charges
Real Estate Dispositions, Held for Sale, and Impairment Charges
Real Estate Dispositions
On May 16, 2016, we completed the sale of our Dayton, Ohio property for $0.2 million. There was no gain or loss recognized on this sale. We considered this office asset to be non-core to our long term strategy, and we re-deployed the proceeds to pay down outstanding debt.
The table below summarizes the components of operating income from the real estate and related assets disposed of for the Dayton, Ohio property during the three and six months ended June 30, 2016, and 2015, respectively (dollars in thousands):
 
 
For the three months ended June 30,
 
For the six months ended June 30,
 
 
2016
 
2015
 
2016
 
2015
Operating revenue
 
$
1


$
106

 
$
45

 
$
215

Operating expense
 
50

 
50

 
103

 
105

Other expense
 
—

 
(25
)
 
(43
)
(1) 
(49
)
(Loss) income from real estate and related assets sold
 
$
(49
)
 
$
31

 
$
(101
)
 
$
61

(1)
Includes $0.04 million impairment charge on our Dayton, Ohio property.

Real Estate Held for Sale
As of June 30, 2016, we classified one property located in Rock Falls, Illinois, two properties located in Angola, Indiana and one property located in Montgomery, Alabama, as held for sale under the provisions of ASC 360-10, “Property, Plant, and Equipment,” which requires that the assets and liabilities of any such properties, be presented separately in our condensed consolidated balance sheet in the current period presented. We consider these industrial assets to be non-core to our long term strategy. We have executed sales agreements for each of these properties and anticipate completing these sales during third quarter 2016.

The table below summarizes the components of income from real estate and related assets held for sale (dollars in thousands):
 
 
 
For the three months ended June 30,
 
For the six months ended June 30,
 
 
2016
 
2015
 
2016
 
2015
Operating revenue
 
$
119

 
$
212

 
$
242

 
$
424

Operating expense
 
29

 
65

 
57

 
131

Other expense
 
(200
)
(1) 
(33
)
 
(232
)
(1) 
(65
)
(Loss) income from real estate and related assets held for sale
 
$
(110
)
 
$
114

 
$
(47
)
 
$
228

 
(1)
Includes $0.2 million impairment charge on our four properties held for sale.

The table below summarizes the components of the assets and liabilities held for sale reflected on the accompanying condensed consolidated balance sheet (dollars in thousands):
 
 
June 30, 2016
ASSETS HELD FOR SALE
 
Real estate, at cost
$
4,593

Less: accumulated depreciation
1,187

Total real estate held for sale, net
3,406

Lease intangibles, net
153

Deferred rent receivable, net
259

Other assets
2

TOTAL ASSETS HELD FOR SALE
$
3,820

LIABILITIES HELD FOR SALE
 
Deferred rent liability, net
$
274

Asset retirement obligation
83

Other liabilities
—

TOTAL LIABILITIES HELD FOR SALE
$
357


Impairment Charge
We performed an evaluation and analysis on our portfolio and determined that our Dayton, Ohio property was impaired during the three months ended March 31, 2016 by an additional $0.04 million. We sold this property for $0.2 million in May 2016, and did not recognize any gain or loss on the sale. This property was previously impaired by $0.6 million during fiscal year 2015.
We also recorded impairment charges of $0.2 million on our four properties classified as held for sale as of June 30, 2016.
The fair values for the above properties were calculated using Level 3 inputs which include an executed purchase and sale agreement and estimated selling costs.
No other impairment was recognized on our portfolio during both the three and six months ended June 30, 2016 and June 30, 2015, respectively.