Investments in Unconsolidated Joint Ventures (Tables)

12 Months Ended

Dec. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

Schedule of general information on joint ventures

The following table summarizes the investments in unconsolidated joint ventures sold during the years ended December 31, 2016, 2015, and 2014:



Property	Ownership Interest	Disposition Date	Type of Sale	Gross Asset Valuation (in thousands)⁽¹⁾		Gain (Loss) on Sale (in thousands)⁽²⁾
EOP Denver	0.48%	September 2016	Ownership Interest	$	180,700	$	300
33 Beekman ⁽³⁾	45.90%	May 2016	Property	196,000		33,000
EOP Denver	4.79%	March 2016	Ownership Interest	180,700		2,800
7 Renaissance Square	50.00%	March 2016	Property	20,700		4,200
1 Jericho Plaza ⁽⁴⁾	66.11%	February 2016	Ownership Interest	95,200		3,300
The Meadows	50.00%	August 2015	Property	121,100		(1,600		)
315 West 36th Street	35.50%	September 2015	Ownership Interest	115,000		16,300
180 Broadway⁽⁵⁾	25.50%	September 2014	Property	222,500		16,500
747 Madison Avenue⁽⁶⁾	33.33%	May 2014	Ownership Interest	160,000		—
West Coast Office portfolio	42.02%	March 2014	Ownership Interest	756,000		85,600
21-25 West 34th Street⁽⁷⁾	49.90%	January 2014	Ownership Interest	114,900		20,900


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


(2)	Represents the Company's share of the gain or loss. The gain on sale is net of $2.3 million employee compensation awards accrued in connection with the realization of these investment gains as bonuses to certain employees that were instrumental in realizing the gains on sale.


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


(4)	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.


(5)	In connection with the sale of the property, we also recognized a promote of $3.3 million.

(6)

We sold our ownership interest in the joint venture, which 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 property. We also recognized a promote of $10.3 million and originated a $30.0 million preferred equity investment. Given our continuing involvement as a preferred equity holder, we deferred the gain on sale of $13.1 million as we did not meet the requirements of a sale under the full accrual method. We, along with our joint venture partners, retained one apartment unit at this property.


(7)	We sold our ownership interest in the joint venture. We, along with our joint venture partner, retained approximately 91,300 square feet (unaudited) of development rights at the property.

As of December 31, 2016 and 2015, the carrying value for acquisition, development and construction arrangements were as follows (in thousands):



Loan Type	December 31, 2016		December 31, 2015		Initial Maturity Date
Mezzanine Loan and Preferred Equity	$	100,000	$	99,936	March 2017
Mezzanine Loan⁽¹⁾	45,622		45,942		February 2022
Mezzanine Loan⁽²⁾	24,542		—		July 2036
	$	170,164	$	145,878


(1)	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.


(2)	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.

The table below provides general information on each of our joint ventures as of December 31, 2016:



Property	Partner	Ownership Interest ⁽¹⁾	Economic Interest ⁽¹⁾	Unaudited Approximate Square Feet	Acquisition Date ⁽²⁾	Acquisition Price⁽²⁾ (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⁽³⁾	Onyx Equities/Credit Suisse	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⁽⁴⁾	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⁽⁵⁾	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⁽⁶⁾	Private Investors	32.28%	32.28%	16,736	December 2012	75,000
650 Fifth Avenue⁽⁷⁾	Jeff Sutton	50.00%	50.00%	69,214	November 2013	—
121 Greene Street	Jeff Sutton	50.00%	50.00%	7,131	September 2014	27,400



Property	Partner	Ownership Interest ⁽¹⁾	Economic Interest ⁽¹⁾	Unaudited Approximate Square Feet	Acquisition Date ⁽²⁾	Acquisition Price⁽²⁾ (in thousands)
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	February 2015	36,668
131-137 Spring Street	Invesco Real Estate	20.00%	20.00%	68,342	August 2015	277,750
76 11th Avenue⁽⁸⁾	Oxford/Vornado	33.33%	35.09%	764,000	March 2016	138,240
605 West 42nd Street⁽⁹⁾	The Moinian Group	20.00%	20.00%	927,358	April 2016	759,000
11 Madison Avenue⁽¹⁰⁾	PGIM Real Estate	60.00%	60.00%	2,314,000	August 2016	2,605,000
333 East 22nd Street ⁽¹¹⁾	Private Investors	33.33%	33.33%	26,926	August 2016	—
400 E 57th Street ⁽¹²⁾	Blackrock, Inc and Stonehenge Partners	51.00%	41.00%	290,482	October 2016	170,000


(1)	Ownership interest and economic interest represent the Company's interests in the joint venture as of December 31, 2016. Changes in ownership or economic interests within the current year are disclosed in the notes below.


(2)	Acquisition date and price represent the date on which the Company initially acquired an interest in the joint venture and the actual or implied gross purchase price for the joint venture on that date. Acquisition date and price are not adjusted for subsequent acquisitions or dispositions of interest.


(3)	In connection with the restructuring of the joint venture and the loan on the property, our 20.26% ownership increased by 57.52% in October 2015. Our ownership percentage was reduced 66.11% in the first quarter of 2016 upon completion of the restructuring of the venture.


(4)	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.


(5)	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.


(6)	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.

(7)

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. In November 2016, the joint venture entered into a lease for an additional 36,890 square feet at the property for a term lasting sixteen years and ten months.

(8)

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 and our right to 38% of the total extension fee while each of our partners is entitled to receive 31% of the total extension fee.


(9)	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.

(10)

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 was accounted for under the profit sharing method. Under the profit sharing method the Company recognized its share of the operations of the property and also recognized the other partner's share of depreciation. In November 2016, the Company obtained consent to the modifications to the mortgage on the property, which resulted in the Company achieving sale accounting on the transaction. The achievement of sale accounting discontinued recognition of the other partner's share of depreciation from that date and had no effect on the balance sheet presentation of the investment. Included in equity in net income from unconsolidated joint ventures is $8.4 million of depreciation for the year ended December 31, 2016 representing the other partner's share of depreciation.


(11)	The joint venture acquired a leasehold interest in the property in October 2016.

(12)

In October 2016, the Company sold a 49% interest in this property to Blackrock, Inc. The Company's interest in the property was sold within a consolidated joint venture owned 90% by the Company and 10% by Stonehenge. The transaction resulted in the deconsolidation of the venture's remaining 51% interest in the property. The Company's joint venture with Stonehenge remains consolidated resulting in the combined 51% interest being shown within investments in unconsolidated joint ventures on the Company's balance sheet.

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 December 31, 2016 and 2015, respectively, are as follows (amounts in thousands):



Property	Maturity Date	Interest Rate ⁽¹⁾		December 31, 2016			December 31, 2015
Fixed Rate Debt:
1745 Broadway ⁽²⁾	January 2017	5.68	%	$	340,000		$	340,000
521 Fifth Avenue	November 2019	3.73	%	170,000			170,000
717 Fifth Avenue ⁽³⁾	July 2022	4.45	%	300,000			300,000
717 Fifth Avenue ⁽³⁾	July 2022	6.52	%	355,328			325,704
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	3.24	%	177,000			20,910
400 East 57th Street	November 2026	3.00	%	100,000			—
Stonehenge Portfolio ⁽⁴⁾	Various	4.19	%	362,518			430,627
280 Park Avenue				—			692,963
7 Renaissance				—			2,927
Total fixed rate debt				$	3,566,846		$	2,645,131
Floating Rate Debt:
10 East 53rd Street ⁽⁵⁾	February 2017	2.98	%	$	125,000		$	125,000
724 Fifth Avenue	April 2017	2.90	%	275,000			275,000
1552 Broadway ⁽⁶⁾	April 2017	4.68	%	185,410			190,409
55 West 46th Street ⁽⁷⁾	October 2017	2.78	%	157,322			150,000
175-225 Third Street	December 2017	4.51	%	40,000			40,000
Jericho Plaza ⁽⁸⁾	March 2018	4.64	%	76,993			163,750
605 West 42nd Street	July 2018	2.91	%	539,000			—
650 Fifth Avenue ⁽⁹⁾	August 2018	4.10	%	77,500			65,000
280 Park Avenue	June 2019	2.51	%	900,000			30,000
121 Greene Street	November 2019	1.98	%	15,000			15,000
131-137 Spring Street	August 2020	2.03	%	141,000			141,000
11 West 34th Street	January 2021	1.93	%	23,000			23,000
100 Park Avenue	February 2021	2.23	%	360,000			360,000
21 East 66th Street	June 2033	3.00	%	1,726			1,805
Stonehenge Portfolio ⁽¹⁰⁾	Various	5.71	%	65,577			10,500
33 Beekman				—			73,518
Total floating rate debt				$	2,982,528		$	1,663,982
Total joint venture mortgages and other loans payable				$	6,549,374		$	4,309,113
Deferred financing costs, net				(95,408		)	(42,565		)
Total joint venture mortgages and other loans payable, net				$	6,453,966		$	4,266,548

____________________________________________________________________


(1)	Effective weighted average interest rate for the year ended December 31, 2016, taking into account interest rate hedges in effect during the period.


(2)	In January 2017, this loan was refinanced with a new $375.0 million mortgage, of which $340.0 million was drawn at closing, with a floating interest rate of LIBOR + 1.85% and a maturity date of January 2020.


(3)	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.


(4)	Amount is comprised of $13.1 million, $34.5 million, $139.7 million, and $175.2 million in fixed-rate mortgages that mature in April 2017, November 2017, August 2019, and June 2024, respectively.


(5)	In February 2017, this loan was refinanced with a new $170.0 million mortgage with a floating interest rate of LIBOR + 2.25% and a maturity date of February 2020.


(6)	These loans are comprised of a $145.0 million mortgage loan and a $41.5 million mezzanine loan. As of December 31, 2016, $0.6 million of the mortgage loan and $0.5 million of the mezzanine loan was unfunded.


(7)	This loan has a committed amount of $190.0 million, of which $32.7 million was unfunded as of December 31, 2016.


(8)	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.


(9)	This loan has a committed amount of $97.0 million, of which $19.5 million was unfunded as of December 31, 2016.


(10)	Amount is comprised of $55.3 million and $10.2 million in floating-rate mortgages that mature in June 2017 and December 2017, respectively.

Schedule of combined balance sheets for the unconsolidated joint ventures

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



	December 31, 2016		December 31, 2015
Assets
Commercial real estate property, net	$	9,131,717	$	6,122,468
Cash and restricted cash	328,455		258,564
Tenant and other receivables, related party receivables, and deferred rents receivable, net of allowance	232,778		208,802
Debt and preferred equity investments, net	336,164		145,878
Other assets	683,481		248,474
Total assets	$	10,712,595	$	6,984,186
Liabilities and members' equity
Mortgages and other loans payable, net	$	6,453,966	$	4,266,548
Deferred revenue/gain	356,414		209,095
Other liabilities	391,500		314,065
Members' equity	3,510,715		2,194,478
Total liabilities and members' equity	$	10,712,595	$	6,984,186
Company's investments in unconsolidated joint ventures	$	1,890,186	$	1,203,858

Schedule of combined statements of income for the unconsolidated joint ventures

The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years ended December 31, 2016, 2015, and 2014 are as follows (in thousands):



	Year Ended December 31,
	2016			2015			2014
Total revenues	$	712,689		$	576,845		$	522,132
Operating expenses	126,913			106,613			82,436
Ground rent	14,924			14,083			9,898
Real estate taxes	111,673			89,734			64,217
Interest expense, net of interest income	197,741			199,126			178,743
Amortization of deferred financing costs	24,829			13,394			12,395
Transaction related costs	5,566			615			535
Depreciation and amortization	199,011			149,023			137,793
Total expenses	$	680,657		$	572,588		$	486,017
Loss on early extinguishment of debt	(1,606		)	(1,089		)	(6,743		)
Net income before gain on sale	$	30,426		$	3,168		$	29,372
Company's equity in net income from unconsolidated joint ventures	$	11,874		$	13,028		$	26,537