Investments in Unconsolidated Joint Ventures (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Equity Method Investments [Line Items]

The table below provides general information on each of our joint ventures as of December 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
11 West 34th Street	Private Investor/ Jeff Sutton	30.00%	30.00%	17,150	December 2010	10,800
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%	57,718	August 2011	136,550
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%	13,069	December 2012	75,000
650 Fifth Avenue⁽⁶⁾	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
55 West 46th Street	Prudential Real Estate Investors	25.00%	25.00%	347,000	November 2014	295,000
Stonehenge Portfolio⁽⁷⁾	Various	Various	Various	1,439,016	February 2015	36,668
131-137 Spring Street⁽⁸⁾	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 East 57th Street⁽⁹⁾	BlackRock, Inc and Stonehenge Partners	51.00%	41.00%	290,482	October 2016	170,000
One Vanderbilt⁽¹⁰⁾	National Pension Service of Korea/Hines Interest LP	71.01%	71.01%	—	January 2017	3,310,000
Worldwide Plaza	RXR Realty / New York REIT / Private Investor	24.35%	24.35%	2,048,725	October 2017	1,725,000
1515 Broadway⁽¹¹⁾	Allianz Real Estate of America	56.87%	56.87%	1,750,000	November 2017	1,950,000
2 Herald Square	Israeli Institutional Investor	51.00%	51.00%	369,000	November 2018	266,000


(1)	Ownership interest and economic interest represent the Company's interests in the joint venture as of December 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)	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)	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.


(8)	In January 2019, we closed on the sale of our interest in this property to our joint venture partner. The transaction generated net cash proceeds to the Company of $15.2 million.

(9)

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.


(10)	The partners have committed aggregate equity to the project 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 December 31, 2018 the total of the two partners' ownership interests based on equity contributed was 23.4%.

(11)

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



Loan Type	December 31, 2018		December 31, 2017		Maturity Date
Mezzanine Loan⁽¹⁾	$	44,357	44,823		February 2022
Mezzanine Loan and Preferred Equity ⁽²⁾	—		100,000
Mezzanine Loan⁽³⁾	—		26,716
	$	44,357	$	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 mezzanine loan was repaid and the preferred equity interest was redeemed in March 2018.


(3)	The Company was redeemed on this investment in July 2018.

Schedule of Mortgage and Other Loans Payable on Joint Venture Properties

The first mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases at December 31, 2018 and 2017, respectively, are as follows (amounts in thousands):



Property	Economic Interest ⁽¹⁾		Maturity Date	Interest Rate ⁽²⁾		December 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			—
1515 Broadway	56.87	%	March 2025		3.93%	855,876			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%	99,828			100,000
Worldwide Plaza	24.35	%	November 2027		3.98%	1,200,000			1,200,000
Stonehenge Portfolio ⁽⁵⁾	Various		Various		4.20%	321,076			357,282
3 Columbus Circle ⁽⁶⁾						—			350,000
Total fixed rate debt						$	5,666,108		$	5,569,138
Floating Rate Debt:
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
10 East 53rd Street	55.00	%	February 2020	L+	2.25%	170,000			170,000
131-137 Spring Street ⁽⁷⁾	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 ⁽⁸⁾	25.00	%	November 2020	L+	2.13%	185,569			171,444
11 West 34th Street	30.00	%	January 2021	L+	1.45%	23,000			23,000
103 East 86th Street ⁽⁹⁾	1.00	%	January 2021	L+	1.40%	38,000			55,340
100 Park Avenue	49.90	%	February 2021	L+	1.75%	360,000			360,000
One Vanderbilt ⁽¹⁰⁾	71.01	%	September 2021	L+	2.75%	375,000			355,535
2 Herald Square ⁽¹¹⁾	51.00	%	November 2021	L+	1.55%	133,565			—
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%	1,571			1,648
175-225 Third Street Brooklyn, New York ⁽¹²⁾						—			40,000
1745 Broadway ⁽¹²⁾						—			345,000
Jericho Plaza ⁽¹³⁾						—			81,099
724 Fifth Avenue ⁽¹⁴⁾						—			275,000
Total floating rate debt						$	3,387,705		$	3,979,066
Total joint venture mortgages and other loans payable						$	9,053,813		$	9,548,204
Deferred financing costs, net						(103,191		)	(136,103		)
Total joint venture mortgages and other loans payable, net						$	8,950,622		$	9,412,101


(1)	Economic interest represents the Company's interests in the joint venture as of December 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 rate as of December 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 $134.3 million, $54.1 million, and $132.6 million in fixed-rated mortgages that mature in August 2019, June 2024, and April 2028, respectively.


(6)	In November 2018, we closed on the sale of our interest in the property to our joint venture partner.


(7)	In January 2019, we closed on the sale of our interest in this property to our joint venture partner.


(8)	This loan has a committed amount of $195.0 million, of which $9.4 million was unfunded as of December 31, 2018.


(9)	In February 2019, along with our joint venture partner, we closed on the sale of the property.


(10)	This loan is a $1.75 billion construction facility, with reductions in interest cost 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.


(11)	This loan has a committed amount of $150.0 million.


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


(13)	In 2018, we closed on the sale of our interest in the property.


(14)	In 2018, we closed on the sale of substantially all of our interest in the property to our joint venture partner.

Equity Method Investments, Summarized Financial Information Balance Sheet

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



	December 31, 2018		December 31, 2017
Assets ⁽¹⁾
Commercial real estate property, net	$	14,347,673	$	12,822,133
Cash and restricted cash	381,301		494,909
Tenant and other receivables, related party receivables, and deferred rents receivable, net of allowance	273,141		349,944
Debt and preferred equity investments, net	44,357		202,539
Other assets	2,187,166		1,407,806
Total assets	$	17,233,638	$	15,277,331
Liabilities and equity ⁽¹⁾
Mortgages and other loans payable, net	$	8,950,622	$	9,412,101
Deferred revenue/gain	1,660,838		985,648
Other liabilities	946,313		411,053
Equity	5,675,865		4,468,529
Total liabilities and equity	$	17,233,638	$	15,277,331
Company's investments in unconsolidated joint ventures	$	3,019,020	$	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.

Equity Method Investments, Summarized Financial Information Income Statement


(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.

The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the years ended December 31, 2018, 2017, and 2016 are as follows (in thousands):



	Year Ended December 31,
	2018			2017			2016
Total revenues	$	1,244,804		$	904,230		$	712,689
Operating expenses	219,440			157,610			126,913
Real estate taxes	226,961			142,774			111,673
Ground rent	18,697			16,794			14,924
Interest expense, net of interest income	363,055			250,063			197,741
Amortization of deferred financing costs	21,634			23,026			24,829
Transaction related costs	—			146			5,566
Depreciation and amortization	421,458			279,419			199,011
Total expenses	$	1,271,245		$	869,832		$	680,657
Loss on early extinguishment of debt	—			(7,899		)	(1,606		)
Net (loss) income before gain on sale ⁽¹⁾	$	(26,441	)	$	26,499		$	30,426
Company's equity in net income from unconsolidated joint ventures ⁽¹⁾	$	7,311		$	21,892		$	11,874


(1)	The combined statements of operations 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

Schedule of Equity Method Investments [Line Items]

Equity Method Investments

The following table summarizes the investments in unconsolidated joint ventures sold during the years ended December 31, 2018, 2017, and 2016:



Property	Ownership Interest Sold	Disposition Date	Type of Sale	Gross Asset Valuation (in thousands)⁽¹⁾		Gain (Loss) on Sale (in thousands)⁽²⁾
3 Columbus Circle	48.90%	November 2018	Ownership Interest	$	851,000	$	160,368
Mezzanine Loan⁽³⁾	33.33%	August 2018	Repayment	15,000		N/A
724 Fifth Avenue	49.90%	July 2018	Ownership Interest	365,000		64,587
Jericho Plaza⁽⁴⁾	11.67%	June 2018	Ownership Interest	117,400		147
1745 Broadway	56.87%	May 2018	Property	633,000		52,038
175-225 Third Street Brooklyn, New York	95.00%	April 2018	Property	115,000		19,483
Stonehenge Village⁽⁵⁾	0.50%	March 2018	Property	287,000		(5,701		)
1515 Broadway⁽⁶⁾	13.00%	February 2018	Ownership Interest	1,950,000		—
1274 Fifth Avenue⁽⁵⁾	9.83%	February 2018	Property	44,100		(362		)
102 Greene Street	10.00%	September 2017	Ownership Interest	43,500		283
76 11th Avenue⁽⁷⁾	33.33%	May 2017	Repayment	138,240		N/A
Stonehenge Portfolio (partial)⁽⁶⁾	Various	March 2017	Ownership Interest	300,000		871
EOP Denver	0.48%	September 2016	Ownership Interest	180,700		300
33 Beekman ⁽⁸⁾	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
Jericho Plaza ⁽⁴⁾	66.11%	February 2016	Ownership Interest	95,200		3,300


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


(2)	Represents the Company's share of the gain or loss. The gain on sale is net of $11.7 million, $0, and $1.1 million of employee compensation accrued in connection with the realization of these investment gains in the years ended December 31, 2018, 2017, and 2016, respectively. Additionally, gain (loss) amounts do not include adjustments for expenses recorded in subsequent periods.


(3)	Our investment in a joint venture that owned a mezzanine loan secured by a commercial property in midtown Manhattan was repaid after the joint venture received repayment of the underlying loan.


(4)	We sold our 11.67% interest in June 2018. In the first quarter of 2016, our ownership percentage was reduced from 77.78% to 11.67%, upon completion of a restructuring of the joint venture.


(5)	Properties were part of the Stonehenge Portfolio.


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


(7)	Our investment in a joint venture that owned two mezzanine notes secured by interests in the entity that owns 76 11th Avenue was repaid after the joint venture received repayment of the underlying loans.


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