Investments in Unconsolidated Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Equity Method Investments [Line Items]

Schedule of general information on joint ventures

The table below provides general information on each of our joint ventures as of March 31, 2018:



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	February 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
919 Third Avenue⁽³⁾	New York State Teacher's Retirement System	51.00%	51.00%	1,454,000	January 2007	1,256,727
1745 Broadway⁽⁴⁾	Ivanhoe Cambridge, Inc.	56.87%	56.87%	674,000	April 2007	520,000
Jericho Plaza⁽⁵⁾	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⁽⁶⁾	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⁽⁷⁾	Jeff Sutton	50.00%	50.00%	57,718	August 2011	136,550
724 Fifth Avenue	Jeff Sutton	50.00%	50.00%	65,010	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⁽⁸⁾	Private Investors	32.28%	32.28%	13,069	December 2012	75,000
650 Fifth Avenue⁽⁹⁾	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
175-225 Third Street Brooklyn, New York⁽¹⁰⁾	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⁽¹¹⁾	Various	Various	Various	1,439,016	February 2015	36,668
131-137 Spring Street	Invesco Real Estate	20.00%	20.00%	68,342	August 2015	277,750
605 West 42nd Street	The Moinian Group	20.00%	20.00%	927,358	April 2016	759,000
11 Madison Avenue	PGIM Real Estate	60.00%	60.00%	2,314,000	August 2016	2,605,000
333 East 22nd Street	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
One Vanderbilt⁽¹³⁾	National Pension Service of Korea/Hines Interest LP	71.01%	71.01%	—	January 2017	3,310,000
Mezzanine Loan⁽¹⁴⁾	Private Investors	33.33%	33.33%	—	May 2017	15,000
Worldwide Plaza	RXR Realty / New York REIT / Private Investor	24.35%	24.35%	2,048,725	October 2017	1,725,000
1515 Broadway⁽¹⁵⁾	Allianz Real Estate of America	56.87%	56.87%	1,750,000	November 2017	1,950,000


(1)	Ownership interest and economic interest represent the Company's interests in the joint venture as of March 31, 2018. 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 January 2018, the partnership agreement for our investment was modified resulting in the Company no longer having a controlling interest in this investment. As a result the investment was deconsolidated as of January 1, 2018. The Company recorded its non-controlling interest at fair value resulting in a $49.3 million fair value adjustment in the consolidated statement of operations. This fair value was allocated to the assets and liabilities, including identified intangibles of the property.


(4)	In April 2018, the Company entered into an agreement to sell its interest in 1745 Broadway. The transaction is expected to close in the second quarter of 2018.


(5)	In April 2018, the Company entered into an agreement to sell its interest in Jericho Plaza. The transaction is expected to close in the second quarter of 2018.


(6)	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.


(7)	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.


(8)	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.

(9)

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.


(10)	In April 2018, the Company, together with its joint venture partners, closed on the sale of this property.


(11)	In February and March 2018, the Company, together with its joint venture partner, closed on the sale of two properties from the Stonehenge Portfolio. These sales are further described under Sale of Joint Venture Interest of Properties below.

(12)

In October 2016, the Company sold a 49% interest in this property to an investment account managed by 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.


(13)	The partners have committed aggregate equity totaling no less than $525 million and their ownership interest in the joint venture is based on their capital contributions, up to an aggregate maximum of 29.0%. At March 31, 2018 the total of the two partners' ownership interests based on equity contributed was 6.84%.

(14)

In May 2017, the Company contributed a mezzanine loan secured by a commercial property in midtown Manhattan to a joint venture and retained a 33.33% interest in the venture. The carrying value is net of $10.0 million that was sold, which is included in other assets and other liabilities on the consolidated balance sheets as a result of the transfers not meeting the conditions for sale accounting. The loan matures in November 2018.

(15)

In November 2017, the Company sold a 30% interest in 1515 Broadway to affiliates of Allianz Real Estate. The sale did not meet the criteria for sale accounting and as a result the property was accounted for under the profit sharing method at December 31, 2017. The Company achieved sale accounting upon adoption of ASC 610-20 in January 2018 and recorded a $0.6 billion gain from the sale of the partial interest and related step-up in basis to fair value of the retained non-controlling interest as an adjustment to beginning retained earnings based on the application of the modified retrospective adoption approach. The Company closed on the sale of an additional 13% interest in the property to Allianz in February 2018.

As of March 31, 2018 and December 31, 2017, the carrying value for acquisition, development and construction arrangements were as follows (in thousands):



Loan Type	March 31, 2018		December 31, 2017		Maturity Date
Mezzanine Loan⁽¹⁾	$	44,751	$	44,823	February 2022
Mezzanine Loan⁽²⁾	27,628		26,716		July 2036
Mezzanine Loan and Preferred Equity⁽³⁾	—		100,000
	$	72,379	$	171,539


(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.


(3)	The mezzanine loan was repaid and the preferred equity interest was redeemed in March 2018.

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, 2018 and December 31, 2017, respectively, are as follows (amounts in thousands):



Property	Economic Interest ⁽¹⁾		Maturity Date	Interest Rate ⁽²⁾			March 31, 2018			December 31, 2017
Fixed Rate Debt:
521 Fifth Avenue	50.50	%	November 2019		3.73	%	$	170,000		$	170,000
717 Fifth Avenue ⁽³⁾	10.92	%	July 2022		4.45	%	300,000			300,000
717 Fifth Avenue ⁽³⁾	10.92	%	July 2022		5.50	%	355,328			355,328
650 Fifth Avenue ⁽⁴⁾	50.00	%	October 2022		4.46	%	210,000			210,000
650 Fifth Avenue ⁽⁴⁾	50.00	%	October 2022		5.45	%	65,000			65,000
21 East 66th Street	32.28	%	April 2023		3.60	%	12,000			12,000
919 Third Avenue	51.00	%	June 2023		5.12	%	500,000			—
3 Columbus Circle	48.90	%	March 2025		3.61	%	350,000			350,000
1515 Broadway	56.87	%	March 2025		3.93	%	868,309			872,528
11 Madison Avenue	60.00	%	September 2025		3.84	%	1,400,000			1,400,000
800 Third Avenue	60.52	%	February 2026		3.37	%	177,000			177,000
400 East 57th Street	41.00	%	November 2026		3.00	%	100,000			100,000
Worldwide Plaza	24.35	%	November 2027		3.98	%	1,200,000			1,200,000
Stonehenge Portfolio ⁽⁵⁾	Various		Various		4.25	%	306,990			357,282
Total fixed rate debt							$	6,014,627		$	5,569,138
Floating Rate Debt:
175-225 Third Street ⁽⁶⁾	95.00	%	June 2018	Prime+	1.00	%	$	40,000		$	40,000
Jericho Plaza ⁽⁷⁾	11.67	%	March 2019	L+	4.15	%	81,922			81,099
724 Fifth Avenue ⁽⁸⁾	50.00	%	April 2019	L+	2.42	%	275,000			275,000
280 Park Avenue	50.00	%	September 2019	L+	1.73	%	1,200,000			1,200,000
121 Greene Street	50.00	%	November 2019	L+	1.50	%	15,000			15,000
1745 Broadway ⁽⁹⁾	56.87	%	January 2020	L+	1.85	%	345,000			345,000
10 East 53rd Street	55.00	%	February 2020	L+	2.25	%	170,000			170,000
131-137 Spring Street	20.00	%	August 2020	L+	1.55	%	141,000			141,000
1552 Broadway	50.00	%	October 2020	L+	2.65	%	195,000			195,000
55 West 46th Street ⁽¹⁰⁾	25.00	%	November 2020	L+	2.13	%	172,511			171,444
11 West 34th Street	30.00	%	January 2021	L+	1.45	%	23,000			23,000
100 Park Avenue	49.90	%	February 2021	L+	1.75	%	360,000			360,000
One Vanderbilt ⁽¹¹⁾	71.01	%	September 2021	L+	3.50	%	375,000			355,535
605 West 42nd Street	20.00	%	August 2027	L+	1.44	%	550,000			550,000
21 East 66th Street	32.28	%	June 2033	1 Year Treasury+	2.75	%	1,628			1,648
Stonehenge Portfolio	Various		January 2021	L+	1.40	%	38,000			55,340
Total floating rate debt							$	3,983,061		$	3,979,066
Total joint venture mortgages and other loans payable							$	9,997,688		$	9,548,204
Deferred financing costs, net							(120,809		)	(136,103		)
Total joint venture mortgages and other loans payable, net							$	9,876,879		$	9,412,101


(1)	Economic interest represents the Company's interests in the joint venture as of March 31, 2018. Changes in ownership or economic interests, if any, within the current year are disclosed in the notes to the investment in unconsolidated joint ventures table above.


(2)	Interest rates as of March 31, 2018, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated interest rate spread over 30-day LIBOR, unless otherwise specified.


(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)	These loans are comprised of a $210.0 million fixed rate mortgage loan and $65.0 million fixed rate mezzanine loan.


(5)	Amount is comprised of $136.4 million and $170.6 million in fixed-rate mortgages that mature in August 2019 and June 2024, respectively.


(6)	In April 2018, along with our joint venture partner, we closed on the sale of the property.


(7)	The property secures a two year $100.0 million loan, of which $81.9 million is currently outstanding. In March 2018, we exercised a 12-month extension option.


(8)	In April 2018, we exercised a 12-month extension option.


(9)	This loan has a committed amount of $375.0 million, of which $30.0 million was unfunded as of March 31, 2018.


(10)	This loan has a committed amount of $195.0 million, of which $22.5 million was unfunded as of March 31, 2018.


(11)	This loan is a $1.5 billion construction facility, which bears interest at 350 basis points over 30-day LIBOR, with reductions based on meeting certain conditions, and has an initial five-year term with two one-year extension options. Advances under the loan are subject to incurred costs, funded equity, loan to value thresholds, and entering into construction contracts.

Schedule of combined balance sheets for the unconsolidated joint ventures

The combined balance sheets for the unconsolidated joint ventures, at March 31, 2018 and December 31, 2017 are as follows (in thousands):



	March 31, 2018		December 31, 2017
Assets ⁽¹⁾
Commercial real estate property, net	$	14,652,483	$	12,822,133
Cash and restricted cash	452,648		494,909
Tenant and other receivables, related party receivables, and deferred rents receivable, net of allowance	359,396		349,944
Debt and preferred equity investments, net	103,379		202,539
Other assets	2,361,367		1,407,806
Total assets	$	17,929,273	$	15,277,331
Liabilities and equity ⁽¹⁾
Mortgages and other loans payable, net	$	9,876,879	$	9,412,101
Deferred revenue/gain	1,911,564		985,648
Other liabilities	493,369		411,053
Members' equity	5,647,461		4,468,529
Total liabilities and members' equity	$	17,929,273	$	15,277,331
Company's investments in unconsolidated joint ventures	$	3,034,596	$	2,362,989


(1)	The combined assets, liabilities and equity for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018.

Schedule of combined statements of income for the unconsolidated joint ventures

The combined statements of operations for the unconsolidated joint ventures, for the three months ended March 31, 2018 and 2017, are as follows (in thousands):



	Three Months Ended March 31,
	2018			2017
Total revenues	$	320,941		$	216,521
Operating expenses	59,773			38,794
Ground rent	4,393			4,251
Real estate taxes	57,027			34,939
Interest expense, net of interest income	89,741			55,328
Amortization of deferred financing costs	5,116			6,505
Transaction related costs	—			89
Depreciation and amortization	105,080			71,164
Total expenses	321,130			211,070
Net (loss) income before gain on sale ⁽¹⁾	$	(189	)	$	5,451
Company's equity in net income from unconsolidated joint ventures ⁽¹⁾	$	4,036		$	6,614


(1)	The combined statements of operation and the Company's equity in net income for the unconsolidated joint ventures reflects the effect of step ups in basis on the retained non-controlling interests in deconsolidated investments as a result of the adoption of ASC 610-20 in January 2018.

Discontinued Operations, Disposed of by Sale [Member]

Schedule of Equity Method Investments [Line Items]

Schedule of general information on joint ventures

The following table summarizes the investments in unconsolidated joint ventures sold during the three months ended March 31, 2018:



Property	Ownership Interest	Disposition Date	Type of Sale	Gross Asset Valuation (in thousands)⁽¹⁾		Loss on Sale (in thousands)⁽²⁾
1274 Fifth Avenue⁽³⁾	9.83%	February 2018	Property	$	44,100	$	(362	)
1515 Broadway⁽⁴⁾	13.00%	February 2018	Ownership Interest	1,950,000		—
Stonehenge Village⁽³⁾	5.00%	March 2018	Property	287,000		(5,701		)


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


(2)	Represents the Company's share of the loss.


(3)	Property was part of the Stonehenge Portfolio.


(4)	Our investment in 1515 Broadway was marked to fair value on January 1, 2018 upon adoption of ASC 610-20.