Property Acquisitions (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Fair Value of Equity Interest Immediately Before Acquisition Date

The acquisition-date fair value of the equity interest in 600 Lexington Avenue and 388-390 Greenwich Street, which were acquired in 2015 and 2014, respectively, immediately before the acquisition date as well as the purchase price fair value, as determined in accordance with the methodology set out in the prior sentence, are as follows (in thousands):



	600 Lexington Avenue			388-390 Greenwich Street
Contract purchase price	$	284,000		$	1,585,000
Net consideration funded by us at closing, excluding consideration financed by debt	(79,085		)	(208,614		)
Debt assumed	(112,795		)	(1,162,379		)
Fair value of retained equity interest	92,120			214,007
Equity and/or debt investment held	(54,575		)	(148,025		)
Other⁽¹⁾	2,533			5,464
Purchase price fair value adjustment	$	40,078		$	71,446

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(1)	Includes the acceleration of a deferred leasing commission from the joint venture to the Company.

Summary of Unaudited Pro Forma Basis Results of Operations

The following table summarizes, on an unaudited pro forma basis, the results of operations of 11 Madison Avenue, which are included in the consolidated results of operations for years ended December 31, 2015 and 2014 as though the acquisition of 11 Madison Avenue was completed on January 1, 2014. The supplemental pro forma data is not necessarily indicative of what the actual results of operations would have been assuming the transactions had been completed as set forth above, nor do they purport to represent our results of operations for future periods.



	Year Ended December 31,
(in thousands, except per share/unit amounts)	2015			2014
Actual revenues since acquisition	$	29,865
Actual net income since acquisition	159
Pro forma revenues	1,657,937			1,540,525
Pro forma income from continuing operations	102,440		—	376,710
Pro forma basic earnings per share	$	0.76		$	7.00
Pro forma diluted earnings per share	$	0.75		$	6.92
Pro forma basic earnings per unit	$	0.76		$	7.00
Pro forma diluted earnings per unit	$	0.75		$	6.92

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(1)

The pro forma income from continuing operations for the years ended December 31, 2015 and 2014 includes the effect of the incremental borrowings, including a $1.4 billion, 10-year, interest only, fixed rate mortgage financing carrying a per annum stated interest rate of 3.838% to complete the acquisition and the preliminary allocation of purchase price. In addition, the pro forma net income for the year ended December 31, 2014 was adjusted to include the sale of real estate assets for properties that have closed either subsequent to December 31, 2015 or we are currently under contract to sell in connection with 11 Madison Avenue, as if the sales were completed on January 1, 2014. The pro forma net income for the year ended December 31, 2015 excludes these sales.

2015 Acquisitions

Property Acquisitions

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following summarizes our preliminary allocation of the purchase price of the assets acquired and liabilities assumed upon the closing of these acquisitions (in thousands):



	600 Lexington Avenue ⁽¹⁾⁽²⁾		187 Broadway and 5 & 7 Dey Street ⁽¹⁾⁽³⁾		11 Madison Avenue ⁽¹⁾⁽⁴⁾		110 Greene Street ⁽¹⁾⁽⁵⁾		Upper East Side Residential⁽¹⁾⁽⁶⁾		1640 Flatbush Avenue⁽¹⁾
Acquisition Date	December 2015		August 2015		August 2015		July 2015		June 2015		March 2015
Ownership Type	Fee Interest		Fee Interest		Fee Interest		Fee Interest		Fee Interest		Fee Interest
Property Type	Office		Residential/Retail		Office		Office		Residential/Retail		Retail

Purchase Price Allocation:
Land	$	97,044	$	22,101	$	849,926	$	89,250	$	17,500	$	6,120
Building and building leasehold	180,224		41,045		1,579,118		165,750		32,500		680
Above-market lease value	—		—		—		—		—		—
Acquired in-place leases	—		—		—		—		—		—
Other assets, net of other liabilities	—		—		—		—		—		—
Assets acquired	277,268		63,146		2,429,044		255,000		50,000		6,800
Mark-to-market assumed debt	—		—		—		—		—		—
Below-market lease value	—		—		—		—		—		—
Derivatives	—		—		—		—		—		—
Liabilities assumed	—		—		—		—		—		—
Purchase price	$	277,268	$	63,146	$	2,429,044	$	255,000	$	50,000	$	6,800
Net consideration funded by us at closing, excluding consideration financed by debt	$	79,085	$	63,146	$	2,429,044	$	255,000	$	50,000	$	6,800
Equity and/or debt investment held	$	54,575	$	—	$	—	$	—	$	—	$	—
Debt assumed	$	112,795	$	—	$	—	$	—	$	—	$	—

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(1)	We are currently in the process of analyzing the purchase price allocation and, as such, we have not allocated any value to intangible assets such as above- and below-market lease or in-place leases.

(2)

In December 2015, we acquired Canada Pension Plan Investment Board's 45% interest in this property, thereby consolidating full ownership of the property. The transaction valued the consolidated interests at $277.3 million. We recognized a purchase price fair value adjustment of $40.1 million upon closing of this transaction. This property, which we initially acquired in May 2010, was previously accounted for as an investment in unconsolidated joint ventures.


(3)	We acquired this property for consideration that included the issuance of $10.0 million and $26.9 million aggregate liquidation preferences of Series R and S Preferred Units, respectively, of limited partnership interest of the Operating Partnership and cash.


(4)	In August 2015, we acquired this property from a partnership of the Sapir Organization and CIM Group, with whom we have no other relationship.


(5)	We acquired a 90.0% controlling interest in this property for consideration that included the issuance of $5.0 million and $6.7 million aggregate liquidation preferences of Series P and Q Preferred Units, respectively, of limited partnership interest of the Operating Partnership and cash.


(6)	We, along with our joint venture partner, acquired this property for consideration that included the issuance of $13.8 million aggregate liquidation preference of Series N Preferred Units of limited partnership interest of the Operating Partnership and cash. We hold a 95.1% controlling interest in this joint venture.

2014 Acquisitions

Property Acquisitions

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

During the year ended December 31, 2015, we finalized the purchase price allocations based on third party appraisal and additional facts and circumstances that existed at the acquisition dates for the following 2014 acquisitions (in thousands):



	102 Greene Street⁽¹⁾		635 Madison Avenue⁽¹⁾		719 Seventh Avenue⁽¹⁾⁽²⁾		115 Spring Street⁽¹⁾		388-390 Greenwich Street⁽¹⁾⁽³⁾
Acquisition Date	October 2014		September 2014		July 2014		July 2014		May 2014
Ownership Type	Fee Interest		Fee Interest		Fee Interest		Fee Interest		Fee Interest
Property Type	Retail		Land		Development		Retail		Office

Purchase Price Allocation:
Land	$	8,215	$	205,632	$	41,850	$	11,078	$	516,292
Building and building leasehold	26,717		15,805		—		44,799		964,434
Above-market lease value	—		—		—		—		—
Acquired in-place leases	1,015		17,345		—		2,037		302,430
Other assets, net of other liabilities	3		—		—		—		6,495
Assets acquired	35,950		238,782		41,850		57,914		1,789,651
Mark-to-market assumed debt	—		—		—		—		—
Below-market lease value	3,701		85,036		—		4,789		186,782
Derivatives	—		—		—		—		18,001
Liabilities assumed	3,701		85,036		—		4,789		204,783
Purchase price	$	32,249	$	153,746	$	41,850	$	53,125	$	1,584,868
Net consideration funded by us at closing, excluding consideration financed by debt	$	32,249	$	153,746	$	41,850	$	53,125	$	208,614
Equity and/or debt investment held	$	—	$	—	$	—	$	—	$	148,025
Debt assumed	$	—	$	—	$	—	$	—	$	1,162,379

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(1)

Based on our preliminary analysis of the purchase price, we had allocated $11.3 million and $21.0 million to land and building, respectively, at 102 Greene Street, $153.7 million to land at 635 Madison Avenue, $14.4 million and $26.7 million to land and building, respectively, at 719 Seventh Avenue, $15.9 million and $37.2 million to land and building, respectively, at 115 Spring Street and $558.7 million and $1.0 billion to land and building, respectively, at 388-390 Greenwich. The impact to our consolidated statements of operations for the twelve months ended December 31, 2015 was $7.6 million in rental revenue for the amortization of aggregate below-market leases and $10.3 million of depreciation expense.

(2)

We, along with our joint venture partner, acquired this property for consideration that included the issuance of $14.1 million aggregate liquidation preference of Series L Preferred Units of limited partnership interest of the Operating Partnership and $9.5 million aggregate liquidation preference of Series K Preferred Units of limited partnership interest of the Operating Partnership. We hold a 75.0% controlling interest in this joint venture.

(3)

In May 2014, we acquired Ivanhoe Cambridge, Inc.'s 49.65% economic interest in this property, thereby consolidating full ownership of the property. The transaction valued the consolidated interests at $1.585 billion. Simultaneous with the closing, we refinanced the previous mortgage with a $1.45 billion mortgage. We also assumed the existing derivative instruments, which swapped $504.0 million of the mortgage to fixed rate (in October 2014, we entered into multiple swap agreements to hedge our interest rate exposure on an additional $500.0 million portion of this mortgage. See Note 8, "Mortgages and Other Loans Payable" for further details). We recognized a purchase price fair value adjustment of $71.4 million upon closing of this transaction. This property, which we initially acquired in December 2007, was previously accounted for as an investment in unconsolidated joint ventures.

2013 Acquisitions

Property Acquisitions

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

During the year ended December 31, 2013, the properties listed below were acquired from third parties. The following summarizes our allocation of the purchase price of the assets acquired and liabilities assumed upon the closing of these acquisitions (in thousands):



	315 West 33rd Street⁽¹⁾		Assemblage of Retail Development Properties on Fifth Avenue⁽¹⁾		16 Court⁽²⁾		248-252 Bedford Avenue⁽³⁾
Acquisition Date	November 2013		November 2013		April 2013		March 2013
Ownership Type	Fee Interest		Fee Interest		Fee Interest		Fee Interest
Property Type	Residential		Development		Office		Residential

Purchase Price Allocation:
Land	$	195,834	$	135,513	$	19,217	$	10,865
Building and building leasehold	164,429		10,487		63,210		44,035
Above market lease value	7,084		—		5,122		—
Acquired in-place leases	26,125		—		9,422		—
Other assets, net of other liabilities	1,142		—		3,380		—
Assets acquired	394,614		146,000		100,351		54,900
Mark-to-market assumed debt	—		—		294		—
Below market lease value	7,839		—		3,885		—
Liabilities assumed	7,839		—		4,179		—
Purchase price	$	386,775	$	146,000	$	96,172	$	54,900
Net consideration funded by us at closing, excluding consideration financed by debt	$	386,775	$	146,000	$	4,000	$	21,782
Equity and/or debt investment held	$	—	$	—	$	13,835	$	—
Debt assumed	$	—	$	—	$	84,642	$	—

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(1)	During the year ended December 31, 2014, we finalized the purchase price allocation based on a third party appraisal and additional facts and circumstances that existed at the acquisition dates. These adjustments did not have a material impact to our consolidated statements of operations for the year ended December 31, 2014.

(2)

In April 2013, we acquired interests from our joint venture partner, City Investment Fund, or CIF, in 16 Court Street in Brooklyn for $4.0 million. We have consolidated the ownership of the building. The transaction valued the consolidated interest at $96.2 million, inclusive of the $84.6 million mortgage encumbering the property. In April 2014, we repaid the mortgage. We recognized a purchase price fair value adjustment of $(2.3) million upon the closing of this transaction. This property, which we initially acquired in July 2007, was previously accounted for as an investment in unconsolidated joint ventures.

(3)

In March 2013, we, along with Magnum Real Estate Group, acquired 84 residential units, consisting of 72 apartment units and 12 townhouses, located at 248-252 Bedford Avenue, Williamsburg, Brooklyn for $54.9 million. Simultaneous with the closing on this property, the joint venture closed on a $22.0 million mortgage loan which was later refinanced in June 2014. The property is above a commercial property already owned by us. We hold a 90.0% controlling interest in this joint venture.