|6 Months Ended|
Jun. 30, 2019
|Real Estate [Abstract]|
Investment properties consist of the following (in thousands):
The Company’s depreciation expense on investment properties was $2.88 million and $6.07 million for the three and six months ended June 30, 2019, respectively. The Company’s depreciation expense on investment properties was $3.33 million and $6.50 million for the three and six months ended June 30, 2018, respectively.
A significant portion of the Company’s land, buildings and improvements serve as collateral for its mortgage loans payable portfolio. Accordingly, restrictions exist as to the encumbered property’s transferability, use and other common rights typically associated with property ownership.
Assets Held for Sale
At December 31, 2018, assets held for sale included a 1.28 acre undeveloped land parcel at Harbor Pointe ("Harbor Pointe land parcel"), Graystone Crossing and Jenks Plaza. All three were sold during the six months ended June 30, 2019. Additionally, in 2019 the Board committed to a plan to sell Perimeter Square, which is classified as assets held for sale as of June 30, 2019.
The Harbor Pointe land parcel sale represents discontinued operations as it is a strategic shift that has a major effect on the Company's financial position or results of operations. Accordingly, the assets and liabilities associated with the Harbor Pointe land parcel have been reclassified for all periods presented.
The $1.15 million impairment charge on assets held for sale for the three and six months ended June 30, 2019 is based on the carrying value of the property exceeding the fair value, less selling costs based on the recent sale subsequent to June 30, 2019, see Note 12. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 inputs.
As of June 30, 2019 and December 31, 2018, assets held for sale and associated liabilities, excluding discontinued operations, consisted of the following (in thousands):
As of June 30, 2019 and December 31, 2018, assets held for sale and associated liabilities for discontinued operations, consisted of the following (in thousands):
In May 2019, an approximate 10,000 square foot outparcel at the JANAF property was demolished resulting in a $331 thousand write-off to make way for a new approximate 20,000 square foot building constructed by a new grocer tenant.
The following properties were sold during the six months ended June 30, 2019 and 2018:
The sale of the Chipotle ground lease at Conyers Crossing, Jenks Plaza and Graystone Crossing did not represent a strategic shift that has a major effect on the Company's financial position or results of operations. Accordingly, the operating results of these properties remains classified within continuing operations for all periods presented.
JANAF Executive Building
In April 2019, the Company absorbed an approximate 25,000 square foot outparcel at JANAF as a result of an unlawful detainer with a delinquent tenant, Mariner Investments, LTD.
The Company inadvertently disclosed the former tenant as Mariner Finance, LLC in the Form 10-Q for the three months ended March 31, 2019 in error.
The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef