Consolidated and unconsolidated real estate joint ventures (Tables)

3 Months Ended

Mar. 31, 2018

Equity Method Investments and Joint Ventures [Abstract]

Consolidated and unconsolidated real estate joint venture properties

From time to time we enter into joint venture agreements through which we own a partial interest in real estate entities that own, develop and operate real estate properties. As of March 31, 2018, we had the following properties that were held by our real estate joint ventures:



	Property⁽¹⁾	Market	Submarket	Our Ownership Interest			RSF
Consolidated joint ventures:
	225 Binney Street	Greater Boston	Cambridge		30.0%		305,212
	409 and 499 Illinois Street	San Francisco	Mission Bay/ SoMa		60.0%		455,069
	1500 Owens Street	San Francisco	Mission Bay/ SoMa		50.1%		158,267
	Campus Pointe by Alexandria	San Diego	University Town Center		55.0%		798,799
	9625 Towne Centre Drive	San Diego	University Town Center		54.7%		163,648
Unconsolidated joint ventures:
	Menlo Gateway	San Francisco	Greater Stanford		25.2%		772,983
	1401/1413 Research Blvd	Maryland	Rockville		65.0%	⁽²⁾	(3)
	360 Longwood Avenue	Greater Boston	Longwood Medical Area		27.5%		210,709
	704 Quince Orchard Road	Maryland	Gaithersburg		56.8%	⁽²⁾	79,931
	1655 and 1725 Third Street	San Francisco	Mission Bay/ SoMa		10.0%		593,765


(1)	In addition to the real estate joint ventures listed above, various partners hold insignificant noncontrolling interests in three other properties in North America.


(2)	Represents our ownership interest; our voting interest is limited to 50%.


(3)	Joint venture with a distinguished retail real estate developer for the development of a 90,000 RSF retail shopping center.

Schedule of consolidated real estate joint ventures

The table below aggregates the balance sheet information of our consolidated VIEs as of March 31, 2018, and December 31, 2017 (in thousands):



	March 31, 2018		December 31, 2017
Investments in real estate	$	1,050,066	$	1,047,472
Cash and cash equivalents	46,040		41,112
Other assets	70,752		68,754
Total assets	$	1,166,858	$	1,157,338

Secured notes payable	$	—	$	—
Other liabilities	54,666		52,201
Total liabilities	54,666		52,201
Alexandria Real Estate Equities, Inc.’s share of equity	584,683		584,160
Noncontrolling interests’ share of equity	527,509		520,977
Total liabilities and equity	$	1,166,858	$	1,157,338

Investment in unconsolidated real estate joint ventures

As of March 31, 2018, our investments in unconsolidated real estate joint ventures accounted for under the equity method of accounting presented in our consolidated balance sheet aggregated $169.9 million, which consists of the following (in thousands):



Property	March 31, 2018
Menlo Gateway	$	97,452
1401/1413 Research Blvd	7,406
360 Longwood Avenue	25,393
704 Quince Orchard Road	4,230
1655 and 1725 Third Street	35,384
	$	169,865

Summary of secured construction loans

As of March 31, 2018, our unconsolidated real estate joint ventures have the following non-recourse secured loans that include the following key terms (dollars in thousands):



		Initial Maturity Date		Extension Option Maturity Date⁽¹⁾	Stated Interest Rate⁽²⁾	Interest Rate⁽²⁾⁽³⁾	100% at Joint Venture Level
Unconsolidated Joint Venture	Our Share	Initial Maturity Date		Extension Option Maturity Date⁽¹⁾	Stated Interest Rate⁽²⁾	Interest Rate⁽²⁾⁽³⁾	Debt Balance⁽⁴⁾		Remaining Commitments
Menlo Gateway, Phase I	25.2%		3/1/19	3/3/20	L+2.50%	4.11%	$	124,382	$	23,454
1401/1413 Research Boulevard	65.0%		5/17/20	7/1/20	L+2.50%	5.11%	9,784		14,733
360 Longwood Avenue	27.5%		9/1/22	9/1/24	3.32%	3.61%	94,091		17,000		⁽⁵⁾
704 Quince Orchard Road	56.8%		3/16/23	N/A	L+1.95%	4.26%	836		13,979
1655 and 1725 Third Street	10.0%		6/29/21	6/29/24	L+3.70%	4.82%	42,197		332,803
							$	271,290	$	401,969
Loan closed in April 2018
Menlo Gateway, Phase II	25.2%		5/1/35	N/A	4.53%	N/A	$	—	$	157,270


(1)	Reflects extension options that exist, which may be subject to certain conditions.


(2)	For acquired loans, interest rate includes adjustments to reflect our effective borrowing costs at the time of acquisition.


(3)	Represents interest rate, including interest expense and amortization of loan fees and discount/premium as of March 31, 2018.


(4)	Represents outstanding principal, net of unamortized deferred financing costs and discount/premium.


(5)	The remaining loan commitment balance excludes an earn-out advance provision that allows for incremental borrowings up to $48.0 million, subject to certain conditions.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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