Investment in Unconsolidated Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Schedule of general information on joint ventures

The table below provides general information on each of our joint ventures as of March 31, 2014 (amounts in thousands):



Property	Partner	Ownership Interest	Economic Interest	Square Feet	Acquisition Date	Acquisition Price(1)
100 Park Avenue	Prudential	49.90%	49.90%	834	January 2000	$	95,800
717 Fifth Avenue	Sutton/Private Investor	10.92%	10.92%	120	September 2006	251,900
800 Third Avenue	Private Investors	42.95%	42.95%	526	December 2006	285,000
1745 Broadway	Witkoff/SITQ/Lehman Bros.	32.26%	32.26%	674	April 2007	520,000
1 and 2 Jericho Plaza	Onyx/Credit Suisse	20.26%	20.26%	640	April 2007	210,000
The Meadows	Onyx	50.00%	50.00%	582	September 2007	111,500
388 and 390 Greenwich Street⁽²⁾	SITQ	50.60%	50.60%	2,600	December 2007	1,575,000
180/182 Broadway	Harel/Sutton	25.50%	25.50%	71	February 2008	43,600
600 Lexington Avenue	CPPIB	55.00%	55.00%	304	May 2010	193,000
11 West 34th Street	Private Investor/Sutton	30.00%	30.00%	17	December 2010	10,800
7 Renaissance	Cappelli	50.00%	50.00%	37	December 2010	4,000
3 Columbus Circle⁽³⁾	Moinian	48.90%	48.90%	769	January 2011	500,000
280 Park Avenue	Vornado	50.00%	49.50%	1,237	March 2011	400,000
1552-1560 Broadway⁽⁴⁾	Sutton	50.00%	50.00%	49	August 2011	136,550
747 Madison Avenue⁽⁵⁾	Harel/Sutton	33.33%	33.33%	10	September 2011	66,250
724 Fifth Avenue	Sutton	50.00%	50.00%	65	January 2012	223,000
10 East 53rd Street	CPPIB	55.00%	55.00%	390	February 2012	252,500
33 Beekman⁽⁶⁾	Harel/Naftali	45.90%	45.90%	145	August 2012	31,000
521 Fifth Avenue	Plaza	50.50%	50.50%	460	November 2012	315,000
21 East 66th Street⁽⁷⁾	Private Investors	32.28%	32.28%	17	December 2012	75,000
315 West 36th Street	Private Investors	35.50%	35.50%	148	December 2012	45,000
650 Fifth Avenue⁽⁸⁾	Sutton	50.00%	50.00%	32	November 2013	—

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(1)	Acquisition price represents the actual or implied gross purchase price for the joint venture.

(2)

The property is leased to a single tenant under a triple-net lease arrangement, which expires in December 2035. The tenant also has an option to acquire the property for a specified price during the period from December 1, 2017 through December 31, 2020. In March 2014, we entered into a contract to acquire our partner's interest in the joint venture. See Note 18, "Commitments and Contingencies" for related disclosure.


(3)	As a result of the sale of a condominium interest in September 2012, Young & Rubicam, Inc., or Y&R, owns a portion of the property, generally floors three through eight referred to as Y&R units. Because the joint venture has an option to repurchase the Y&R units, no gain was recognized on this sale.


(4)	The purchase price pertained only to the purchase of the 1552 Broadway interest which comprised 13,045 square feet. The joint venture also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.


(5)	The joint venture owns 100% interest as tenant-in-common in 30 East 65th Street Corporation and the related proprietary lease of five cooperative apartment units in the building.


(6)	The joint venture owns a fee interest in the property and will develop an approximately 30 story building for student housing. Upon completion of the development, the joint venture will convey a long-term ground lease condominium interest in the building to Pace.


(7)	We hold a 32.28% interest in three retail and two residential units at the property and a 16.14% in four residential units at the property.

(8)

The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue. In connection with the ground lease obligation, SLG provided a performance guaranty and Sutton executed a contribution agreement to reflect its pro rata obligation. In the event the property is converted into a condominium unit and the landlord elects the purchase option, the joint venture shall be obligated to acquire the unit at the then fair value.

Schedule of first mortgage notes payable collateralized by the respective joint venture properties and assignment of leases

The first mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at March 31, 2014 and December 31, 2013, respectively, are as follows (amounts in thousands):



Property	Maturity Date	Interest Rate(1)		March 31, 2014		December 31, 2013
Fixed Rate Debt:
7 Renaissance	December 2015	10.00	%	$	1,276	$	1,276
11 West 34th Street	January 2016	4.82	%	17,129		17,205
280 Park Avenue	June 2016	6.57	%	705,082		706,886
1745 Broadway	January 2017	5.68	%	340,000		340,000
1 and 2 Jericho Plaza	May 2017	5.65	%	163,750		163,750
800 Third Avenue	August 2017	6.00	%	20,910		20,910
388 and 390 Greenwich Street⁽²⁾	December 2017	3.20	%	996,082		996,082
315 West 36th Street	December 2017	3.16	%	25,000		25,000
717 Fifth Avenue⁽³⁾	July 2022	4.45	%	300,000		300,000
21 East 66th Street	April 2023	3.60	%	12,000		12,000
717 Fifth Avenue⁽³⁾	July 2024	9.00	%	306,509		304,000
100 Park Avenue⁽⁴⁾	—	—		—		209,786
21 West 34th Street⁽⁵⁾	—	—		—		100,000
1604-1610 Broadway⁽⁶⁾	—	—		—		27,000
Total fixed rate debt				$	2,887,738	$	3,223,895
Floating Rate Debt:
747 Madison Avenue	October 2014	2.94	%	33,125		33,125
180/182 Broadway	December 2014	2.91	%	89,778		89,893
The Meadows	September 2015	7.75	%	67,350		67,350
3 Columbus Circle⁽⁷⁾	April 2016	2.34	%	237,189		239,233
1552 Broadway⁽⁸⁾	April 2016	4.07	%	169,283		158,690
Other loan payable	June 2016	1.06	%	30,000		30,000
724 Fifth Avenue⁽⁹⁾	January 2017	2.51	%	119,765		120,000
10 East 53rd Street	February 2017	2.66	%	125,000		125,000
33 Beekman⁽¹⁰⁾	August 2017	2.91	%	24,057		18,362
600 Lexington Avenue	October 2017	2.24	%	119,656		120,616
388 and 390 Greenwich Street⁽²⁾	December 2017	1.31	%	142,297		142,297
521 Fifth Avenue	November 2019	2.36	%	170,000		170,000
100 Park Avenue⁽⁴⁾	February 2021	4.28	%	360,000		—
21 East 66th Street	June 2033	2.87	%	1,940		1,959
West Coast Office portfolio⁽¹¹⁾	—	—		—		526,290
Total floating rate debt				$	1,689,440	$	1,842,815
Total joint venture mortgages and other loans payable				$	4,577,178	$	5,066,710

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(1)	Effective weighted average interest rate for the three months ended March 31, 2014, taking into account interest rate hedges in effect during the period.

(2)

These loans are comprised of a $576.0 million mortgage and a $562.4 million mezzanine loan, both of which are fixed rate loans, except for $72.0 million of the mortgage and $70.3 million of the mezzanine loan which are floating. Up to $200.0 million of the mezzanine loan, secured indirectly by these properties, is recourse to us. We believe it is unlikely that we will be required to perform under this guarantee.


(3)	These loans are comprised of a $300.0 million fixed rate mortgage loan and $290.0 million mezzanine loan. The mezzanine loan is subject to accretion based on the difference between contractual interest rate and contractual pay rate.


(4)	In February 2014, the joint venture replaced the previous fixed rate mortgage with a $360.0 million, seven-year floating rate, mortgage and realized a net loss on early extinguishment of $3.2 million.


(5)	In January 2014, we sold our interest in the joint venture, inclusive of our share of the joint venture debt.


(6)	This loan was in default since November 2009 due to the non-payment of debt service. In January 2014, the joint venture relinquished its ground lease position to the lender. During the three months ended March 31, 2014, we also recognized $7.7 million of incentive income, which is included in other income on the consolidated statements of income.

(7)

The joint venture has the ability to increase the mortgage by $40.0 million based on meeting certain performance hurdles. In connection with this obligation, we executed a master lease agreement and our joint venture partner executed a contribution agreement to reflect its pro rata obligation under the master lease. The lien on the mortgage and the master lease excludes the condominium interest owned by Y&R. See Note 5 of prior table.


(8)	These loans are comprised of a $150.0 million mortgage loan and a $41.5 million mezzanine loan and are subject to two one-year extension options. As of March 31, 2014, $12.2 million of the mortgage loan and $10.0 million of the mezzanine loan remained unfunded.


(9)	In April 2014, the joint venture refinanced the mortgage with a $235.0 million mortgage and a $40.0 million mezzanine loan. These new floating rate loans mature in April 2017.


(10)	This loan has a committed amount of $75.0 million, which is recourse to us. Our partner has indemnified us for its pro rata share of the recourse guarantee. A portion of the guarantee terminates upon the joint venture reaching certain milestones. We believe it is unlikely that we will be required to perform under this guarantee.


(11)	In March 2014, we sold our interest in the joint venture, inclusive of our share in the joint venture debt.

Schedule of combined balance sheets for the unconsolidated joint ventures

The combined balance sheets for the unconsolidated joint ventures, at March 31, 2014 and December 31, 2013, are as follows (in thousands):



	March 31, 2014		December 31, 2013
Assets
Commercial real estate property, net	$	6,356,664	$	6,846,021
Other assets	691,636		827,282
Total assets	$	7,048,300	$	7,673,303
Liabilities and members' equity
Mortgages and other loans payable	$	4,577,178	$	5,066,710
Other liabilities	580,870		596,960
Members' equity	1,890,252		2,009,633
Total liabilities and members' equity	$	7,048,300	$	7,673,303
Company's investments in unconsolidated joint ventures	$	1,061,704	$	1,113,218

Schedule of combined statements of income for the unconsolidated joint ventures

The combined statements of income for the unconsolidated joint ventures, from acquisition date through the three months ended March 31, 2014 and 2013 are as follows (in thousands):



	Three Months Ended March 31,
	2014			2013
Total revenues	$	161,138		$	151,231
Operating expenses	26,683			28,611
Ground rent	2,025			657
Real estate taxes	16,936			17,305
Interest expense, net of interest income	52,336			56,407
Amortization of deferred financing costs	4,633			4,283
Transaction related costs	271			—
Depreciation and amortization	45,604			42,611
Total expenses	148,488			149,874
Loss on early extinguishment of debt	(3,197		)	—
Net income before gain on sale	$	9,453		$	1,357
Company's equity in net income from unconsolidated joint ventures	$	6,128		$	5,073