Annual report pursuant to Section 13 and 15(d)

Acquisition of Rental Property

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Acquisition of Rental Property
 12 Months Ended
Dec. 31, 2012
Acquisition of Rental Property [Abstract]  
Acquisition of Rental Property
Acquisition of Rental Property

Jeffersonville, Ohio

In June 2011, we purchased Prime Outlets at Jeffersonville, a 410,000 square foot outlet center, for $134.0 million in cash.  The cash purchase price was funded with proceeds from a $150.0 million senior, unsecured bridge loan.

Atlantic City, New Jersey and Ocean City, Maryland

During 2011, we closed on our admission as a member into four existing entities that resulted in our acquiring substantially all of the economic interests of Atlantic City Outlets The Walk (Atlantic City, New Jersey) and Ocean City Factory Outlets (Ocean City, Maryland). The combined purchase price was approximately $200.3 million, consisting of $116.8 million in cash and the assumption of $83.5 million in indebtedness.

Atlantic City Outlets The Walk is comprised of approximately 490,000 square feet and Ocean City Factory Outlets is comprised of approximately 198,000 square feet. The cash portion of the purchase price for Atlantic City Outlets The Walk and Ocean City Outlets was funded by amounts available under our unsecured lines of credit.

Hershey, Pennsylvania

In September 2011, we purchased substantially all of the economic interests in The Outlets at Hershey, a 247,000 square foot outlet center, for total consideration of $56.0 million, consisting of $24.6 million in cash and the assumption of $31.4 million of indebtedness. The cash consideration included a $6.2 million loan, which is included in other assets in the consolidated balance sheets, to the noncontrolling interest holder collateralized by their ownership interest in the property. The cash consideration for The Outlets at Hershey was funded by amounts available under our unsecured lines of credit.

The aggregate fair value purchase price of the properties acquired during the year ended December 31, 2011 has been allocated as follows:
 
 
Value
 (in thousands)
 
Weighted-Average Amortization Period (in years)
Land
 
$
6,425

 
 
Buildings, improvements and fixtures
 
298,147

 
 
Deferred lease costs and other intangibles
 
 
 
 
Above/below market lease value, net
 
5,166

 
7.1
Below market ground lease value
 
31,993

 
87.6
Lease in place value
 
24,232

 
4.0
Tenant relationships
 
28,628

 
10.2
Lease and legal costs
 
3,444

 
3.2
Total deferred lease costs and other intangibles, net
 
93,463

 
 
Mortgage fair value adjustments
 
(7,081
)
 
 
Net assets acquired
 
390,954

 
 
Less: contingent consideration
 
(3,023
)
 
 
Less: noncontrolling interests
 
(6,845
)
 
 
Consideration transferred
 
$
381,086

 
 


We incurred approximately $2.7 million in third-party acquisition costs which were expensed as incurred.  The aggregate revenues and net loss from the properties from the acquisition dates through December 31, 2011, were $18.5 million, and $1.5 million, respectively.

The results of operations of the acquired properties are included in the consolidated statements of operations beginning on their respective acquisition dates. The following unaudited condensed pro forma financial information for the year ended December 31, 2011 is presented as if the acquisitions had been consummated as of January 1, 2010, the beginning of the previous reporting period (in thousands):
 
 
(Pro forma)
 
 
(Unaudited)
 
 
Year ended December 31,
 
 
2011
 
2010
Total Revenue
 
$
336,838

 
$
317,021

Income from continuing operations
 
47,687

 
35,073