Investments in Unconsolidated Joint Ventures

We have investments in several real estate joint ventures with various partners. As of September 30, 2016, 650 Fifth Avenue, 800 Third Avenue, 21 East 66th Street, 605 West 42^nd Street, 333 East 22nd Street, and certain properties within the Stonehenge Portfolio are VIEs in which we are not the primary beneficiary. Our net equity investment in these VIEs was $220.7 million as of September 30, 2016. As of December 31, 2015, 650 Fifth Avenue and 33 Beekman were VIEs in which we were not the primary beneficiary. Our net equity investment in these VIEs was $39.7 million as of December 31, 2015. Our maximum loss is limited to the amount of our equity investment in these VIEs. All other investments below are voting interest entities. As we do not control the joint ventures listed below, we account for them under the equity method of accounting.

The table below provides general information on each of our joint ventures as of September 30, 2016:



Property	Partner	Ownership Interest	Economic Interest	Approximate Square Feet	Acquisition Date	Acquisition Price⁽¹⁾ (in thousands)
100 Park Avenue	Prudential Real Estate Investors	49.90%	49.90%	834,000	January 2000	$	95,800
717 Fifth Avenue	Jeff Sutton/Private Investor	10.92%	10.92%	119,500	September 2006	251,900
800 Third Avenue	Private Investors	60.52%	60.52%	526,000	December 2006	285,000
1745 Broadway	Ivanhoe Cambridge, Inc.	56.88%	56.88%	674,000	April 2007	520,000
Jericho Plaza ⁽²⁾	Onyx Equities/Private Investor	11.67%	11.67%	640,000	April 2007	210,000
11 West 34th Street	Private Investor/ Jeff Sutton	30.00%	30.00%	17,150	December 2010	10,800
3 Columbus Circle⁽³⁾	The Moinian Group	48.90%	48.90%	741,500	January 2011	500,000
280 Park Avenue	Vornado Realty Trust	50.00%	50.00%	1,219,158	March 2011	400,000
1552-1560 Broadway⁽⁴⁾	Jeff Sutton	50.00%	50.00%	35,897	August 2011	136,550
724 Fifth Avenue	Jeff Sutton	50.00%	50.00%	65,040	January 2012	223,000
10 East 53rd Street	Canadian Pension Plan Investment Board	55.00%	55.00%	354,300	February 2012	252,500
521 Fifth Avenue	Plaza Global Real Estate Partners LP	50.50%	50.50%	460,000	November 2012	315,000
21 East 66th Street⁽⁵⁾	Private Investors	32.28%	32.28%	16,736	December 2012	75,000
650 Fifth Avenue⁽⁶⁾	Jeff Sutton	50.00%	50.00%	32,324	November 2013
121 Greene Street	Jeff Sutton	50.00%	50.00%	7,131	September 2014	27,400
175-225 Third Street Brooklyn, New York	KCLW 3rd Street LLC/LIVWRK LLC	95.00%	95.00%	—	October 2014	74,600
55 West 46th Street	Prudential Real Estate Investors	25.00%	25.00%	347,000	November 2014	295,000
Stonehenge Portfolio	Various	Various	Various	2,046,733	Various	36,668
131-137 Spring Street	Invesco Real Estate	20.00%	20.00%	68,342	August 2015	277,750
76 11th Avenue⁽⁷⁾	Oxford/Vornado	33.33%	36.58%	764,000	March 2016	138,240
605 West 42nd Street⁽⁸⁾	The Moinian Group	20.00%	20.00%	927,358	April 2016	759,000
11 Madison Avenue⁽⁹⁾	PGIM Real Estate	60.00%	60.00%	2,314,000	August 2016	2,605,000
333 East 22nd Street ⁽¹⁰⁾	Private Investors	33.33%	33.33%	26,926	August 2016	—


(1)	Acquisition price represents the actual or implied gross purchase price for the joint venture, which is not adjusted for subsequent acquisitions of additional interests.


(2)	Our ownership percentage was reduced in the first quarter of 2016, from 77.78% to 11.67%, upon completion of the restructuring of the joint venture.


(3)	As a result of the sale of a condominium interest in September 2012, Young & Rubicam, Inc., or Y&R, owns floors three through eight at the property. Because the joint venture has an option to repurchase these floors, the gain associated with this sale was deferred.


(4)	The purchase price represents only the purchase of the 1552 Broadway interest which comprised approximately 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)	We hold a 32.28% interest in three retail and two residential units at the property and a 16.14% interest in three residential units at the property.

(6)

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 our joint venture partner 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.


(7)	The joint venture owns two mezzanine notes secured by interests in the entity that owns 76 11th Avenue. The difference between our ownership interest and our economic interest results from our right to 50% of the total exit fee while each of our partners is entitled to receive 25% of the total exit fee.


(8)	The Company was granted an option to purchase the interest at an agreed upon valuation in July 2014 when it originated a $50.0 million mezzanine loan to the project's developer. The mezzanine loan was repaid prior to the closing of the Company's acquisition of its joint venture interest.

(9)

In August 2016, we closed on the sale of a 40% interest in 11 Madison. The sale did not meet the criteria for sale accounting and as a result the property is being accounted for under the profit sharing method. Under the profit sharing method the Company recognizes its share of the operations of the property and also recognizes the other partner's share of depreciation. Included in equity in net income from unconsolidated joint ventures is $4.7 million of depreciation for the three and nine months ended September 30, 2016 representing the other partner's share of depreciation. Included in Investment in Unconsolidated Joint Ventures at September 30, 2016 are $2.7 billion of assets net of $1.5 billion of liabilities, net of the $482.0 million consideration received at closing for this property. Sale accounting will be met upon the lender group consenting to certain modifications to the mortgage on the property which we expect will be granted during the fourth quarter of 2016. If the modification is not obtained this may result in the Company repurchasing the sold interest from PGIM Real Estate at the sale price. The achievement of sale accounting will discontinue recognition of PGIM Real Estate's share of depreciation from that date and will have no effect on the balance sheet presentation of the investment.


(10)	The joint venture entered into a ground lease for the property commencing in October 2016.

Acquisition, Development and Construction Arrangements

Based on the characteristics of the following arrangements, which are similar to those of an investment, combined with the expected residual profit of not greater than 50%, we have accounted for these debt and preferred equity investments under the equity method. As of September 30, 2016 and December 31, 2015, the carrying value for acquisition, development and construction arrangements were as follows (in thousands):



Loan Type	September 30, 2016		December 31, 2015		Initial Maturity Date
Mezzanine Loan and Preferred Equity	$	100,000	$	99,936	March 2017
Mezzanine Loan	24,119		—		July 2036 ⁽¹⁾
Mezzanine Loan⁽²⁾	45,675		45,942		February 2022
	$	169,794	$	145,878


(1)	The Company has the ability to convert this loan into an equity position starting in 2021 and the borrower is able to force this conversion in 2024.


(2)	We have an option to convert our loan to an equity interest subject to certain conditions. We have determined that our option to convert the loan to equity is not a derivative financial instrument pursuant to GAAP.

Sale of Joint Venture Interest or Property

The following table summarizes the investments in unconsolidated joint ventures sold during the nine months ended September 30, 2016:



Property	Ownership Percentage	Disposition Date	Type of Sale	Gross Asset Valuation (in thousands)⁽¹⁾		Gain on Sale (in thousands)⁽²⁾
1 Jericho Plaza ⁽³⁾	66.11%	February 2016	Office	$	95,200	$	3,300
7 Renaissance Square	50.00%	March 2016	Office	20,700		4,200
EOP Denver	4.79%	March 2016	Office	180,700		2,800
33 Beekman ⁽⁴⁾	45.90%	May 2016	Residential	196,000		33,000
EOP Denver	0.48%	September 2016	Office	180,700		300


(1)	Represents implied gross valuation for the joint venture or sales price of the property.


(2)	Represents the Company's share of the gain. The gain on sale is net of $1.1 million employee compensation awards accrued in connection with the realization of these investment gains as a bonus to certain employees that were instrumental in realizing the gains on sale.


(3)	Our ownership percentage was reduced in the first quarter of 2016, from 77.78% to 11.67%, upon completion of the restructuring of the joint venture.


(4)	In connection with the sale of the property, we also recognized a promote of $10.8 million.

Mortgages and Other Loans Payable

We generally finance our joint ventures with non-recourse debt. However, in certain cases we have provided guarantees or master leases for tenant space. These guarantees and master leases terminate upon the satisfaction of specified circumstances or repayment of the underlying loans. The first mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at September 30, 2016 and December 31, 2015, respectively, are as follows (amounts in thousands):



Property	Maturity Date	Interest Rate ⁽¹⁾		September 30, 2016		December 31, 2015
Fixed Rate Debt:
1745 Broadway	January 2017	5.68	%	$	340,000	$	340,000
521 Fifth Avenue	November 2019	3.73	%	170,000		170,000
717 Fifth Avenue⁽²⁾	July 2022	4.45	%	300,000		300,000
717 Fifth Avenue⁽²⁾	July 2022	5.50	%	355,328		325,704



Property	Maturity Date	Interest Rate ⁽¹⁾		September 30, 2016			December 31, 2015
21 East 66th Street	April 2023	3.60	%	12,000			12,000
3 Columbus Circle	March 2025	3.61	%	350,000			350,000
11 Madison Avenue	September 2025	3.84	%	1,400,000			—
800 Third Avenue	February 2026	3.37	%	177,000			20,910
Stonehenge Portfolio⁽³⁾	Various	4.19	%	364,255			430,627
280 Park Avenue				—			692,963
7 Renaissance Square				—			2,927
Total fixed rate debt				$	3,468,583		$	2,645,131
Floating Rate Debt:
175-225 Third Street ⁽⁴⁾	December 2016	4.50	%	$	40,000		$	40,000
10 East 53rd Street	February 2017	2.99	%	125,000			125,000
724 Fifth Avenue	April 2017	2.91	%	275,000			275,000
1552 Broadway ⁽⁵⁾	April 2017	4.71	%	185,410			190,409
55 West 46th Street ⁽⁶⁾	October 2017	2.79	%	151,536			150,000
Jericho Plaza ⁽⁷⁾	March 2018	4.64	%	76,993			163,750
605 West 42nd Street	July 2018	2.85	%	539,000			—
650 Fifth Avenue ⁽⁸⁾	August 2018	4.17	%	65,000			65,000
280 Park Avenue	June 2019	2.49	%	900,000			30,000
121 Greene Street	November 2019	1.99	%	15,000			15,000
131-137 Spring Street	August 2020	2.04	%	141,000			141,000
11 West 34th Street	January 2021	1.94	%	23,000			23,000
100 Park Avenue	February 2021	2.24	%	360,000			360,000
21 East 66th Street	June 2033	3.00	%	1,746			1,805
Stonehenge Portfolio ⁽⁹⁾	Various	5.81	%	65,664			10,500
33 Beekman				—			73,518
Total floating rate debt				$	2,964,349		$	1,663,982
Total joint venture mortgages and other loans payable				$	6,432,932		$	4,309,113
Deferred financing costs, net				(100,426		)	(42,565		)
Total joint venture mortgages and other loans payable, net				$	6,332,506		$	4,266,548


(1)	Effective weighted average interest rate for the three months ended September 30, 2016, taking into account interest rate hedges in effect during the period.


(2)	These loans are comprised of a $300.0 million fixed rate mortgage loan and $355.3 million mezzanine loan. The mezzanine loan is subject to accretion based on the difference between contractual interest rate and contractual pay rate.


(3)	Amount is comprised of $13.2 million, $34.6 million, $140.3 million, and $176.1 million in fixed-rate mortgages that mature in April 2017, November 2017, August 2019, and June 2024, respectively.


(4)	In October 2016, the loan was extended to December 2017.


(5)	These loans are comprised of a $145.0 million mortgage loan and a $41.5 million mezzanine loan. As of September 30, 2016, $0.6 million of the mortgage loan and $0.5 million of the mezzanine loan were unfunded.


(6)	This loan has a committed amount of $190.0 million, of which $38.5 million was unfunded as of September 30, 2016.


(7)	We hold an 11.67% non-controlling interest in the joint venture and the property secures a two year $100.0 million loan, of which $77.0 million is currently outstanding.


(8)	This loan has a committed amount of $97.0 million, of which $32.0 million was unfunded as of September 30, 2016.


(9)	Amount is comprised of $55.3 million and $10.3 million in floating-rate mortgages that mature in June 2017 and December 2017, respectively.

We act as the operating partner and day-to-day manager for all our joint ventures, except for 800 Third Avenue, Jericho Plaza, 280 Park Avenue, 3 Columbus Circle, 21 East 66th Street, 175-225 Third Street, 605 West 42nd Street and the Stonehenge Portfolio. We are entitled to receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures. We earned $2.0 million and $4.5 million from these services for the three and nine months ended September 30, 2016, respectively. We earned $1.9 million and $6.8 million from these services for the three and nine months ended September 30, 2015, respectively. In addition, we have the ability to earn incentive fees based on the ultimate financial performance of certain of the joint venture properties.

The combined balance sheets for the unconsolidated joint ventures, at September 30, 2016 and December 31, 2015 are as follows (in thousands):



	September 30, 2016		December 31, 2015
Assets
Commercial real estate property, net	$	8,927,385	$	6,122,468
Cash and restricted cash	320,318		258,564
Tenant and other receivables, related party receivables, and deferred rents receivable, net of allowance	227,937		208,802
Debt and preferred equity investments, net	332,506		145,878
Other assets	670,665		248,474
Total assets	$	10,478,811	$	6,984,186
Liabilities and members' equity
Mortgages and other loans payable, net	$	6,332,506	$	4,266,548
Deferred revenue/gain	367,873		209,095
Other liabilities	374,198		314,065
Members' equity	3,404,234		2,194,478
Total liabilities and members' equity	$	10,478,811	$	6,984,186
Company's investments in unconsolidated joint ventures	$	1,860,912	$	1,203,858

The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the three and nine months ended September 30, 2016 and 2015, are as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Total revenues	$	184,221		$	150,638		$	498,308		$	423,089
Operating expenses	34,727			27,647			89,147			79,478
Ground rent	3,744			4,677			10,670			9,841
Real estate taxes	30,814			23,494			79,356			65,205
Interest expense, net of interest income	51,789			51,430			147,876			147,152
Amortization of deferred financing costs	7,155			3,473			17,667			9,628
Transaction related costs	5,359			604			5,359			615
Depreciation and amortization	56,890			38,144			132,035			109,022
Total expenses	190,478			149,469			482,110			420,941
Loss on early extinguishment of debt	—			(248		)	(1,606		)	(1,081		)
Net (loss) income before gain on sale	$	(6,257	)	$	921		$	14,592		$	1,067
Company's equity in net (loss) income from unconsolidated joint ventures	$	(3,968	)	$	3,627		$	11,969		$	10,651