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Investments in Unconsolidated Joint Ventures (Tables)
 9 Months Ended
Sep. 30, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Schedule of general information on joint ventures
The table below provides general information on each of our joint ventures as of September 30, 2023:
PropertyPartner
Ownership
Interest (1)
Economic
Interest (1)
Unaudited Approximate Square Feet
100 Park AvenuePrudential Real Estate Investors49.90%49.90%834,000 
717 Fifth AvenueWharton Properties / Private Investor10.92%10.92%119,500 
800 Third AvenuePrivate Investors60.52%60.52%526,000 
919 Third AvenueNew York State Teacher's Retirement System51.00%51.00%1,454,000 
11 West 34th StreetPrivate Investor / Wharton Properties30.00%30.00%17,150 
280 Park AvenueVornado Realty Trust50.00%50.00%1,219,158 
1552-1560 Broadway (2)
Wharton Properties50.00%50.00%57,718 
10 East 53rd StreetCanadian Pension Plan Investment Board55.00%55.00%354,300 
21 East 66th Street (3)
Private Investors32.28%32.28%13,069 
650 Fifth Avenue (4)
Wharton Properties50.00%50.00%69,214 
11 Madison AvenuePGIM Real Estate60.00%60.00%2,314,000 
One Vanderbilt AvenueNational Pension Service of Korea / Hines Interest LP71.01%71.01%1,657,198 
Worldwide PlazaRXR Realty / New York REIT24.95%24.95%2,048,725 
1515 BroadwayAllianz Real Estate of America56.87%56.87%1,750,000 
2 Herald SquareIsraeli Institutional Investor51.00%51.00%369,000 
115 Spring StreetPrivate Investor51.00%51.00%5,218 
15 Beekman (5)
A fund managed by Meritz Alternative Investment Management20.00%20.00%221,884 
85 Fifth AvenueWells Fargo36.27%36.27%12,946 
One Madison Avenue (6)
National Pension Service of Korea / Hines Interest LP / International Investor25.50%25.50%1,048,700 
220 East 42nd StreetA fund managed by Meritz Alternative Investment Management51.00%51.00%1,135,000 
450 Park Avenue (7)
Korean Institutional Investor / Israeli Institutional Investor
50.10%25.10%337,000 
5 Times SquareRXR Realty led investment group31.55%31.55%1,131,735 
245 Park Avenue (8)
U.S. Affiliate of Mori Trust Co., Ltd50.10%50.10%1,782,793 
625 Madison Avenue (9)
Private Investor90.43%90.43%563,000 
(1)Ownership interest and economic interest represent the Company's interests in the joint venture as of September 30, 2023. Changes in ownership or economic interests within the current year are disclosed in the notes below.
(2)The joint venture that owns 1552 Broadway also owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.
(3)We hold a 32.28% interest in three retail units and one residential unit at the property and a 16.14% interest in two residential units at the property. In October, together with our joint venture partners, we entered into an agreement to sell the equity interests in the condominium units at the property. The sale is anticipated to close in the fourth quarter of 2023, subject to customary closing conditions.
(4)The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
(5)In 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company.
(6)In 2020, the Company admitted partners to the One Madison Avenue development project, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of our remaining 50.5% interest. We recorded our investment at fair value, which resulted in the recognition of a fair value adjustment of $187.5 million. The fair value of our investment was determined by the terms of the joint venture agreement governing the capitalization of the project. In 2021, the Company admitted an additional partner to the development project with the partner's indirect ownership in the joint venture totaling 25.0%. The transaction did not meet sale accounting under ASC 860 and, as a result, was treated as a secured borrowing for accounting purposes and is included in Other liabilities in our consolidated balance sheets at September 30, 2023 and December 31, 2022.
(7)The 50.1% ownership interest reflected in this table is comprised of our 25.1% economic interest and a 25.0% economic interest held by a third-party. The third-party's economic interest is held within a joint venture that we consolidate and recognize in Noncontrolling interests in other partnerships on our consolidated balance sheet. An additional third-party owns the remaining 49.9% economic interest in the property.
(8)In June 2023, the Company sold a 49.9% interest, which resulted in the Company no longer retaining a controlling interest in the entity, as defined in ASC 810, and deconsolidation of the 50.1% interest we retained. We recorded our investment at fair value which resulted in the recognition of a fair value adjustment of ($17.0 million) during the three and nine months ended September 30, 2023. The fair value of our investment was determined by the terms of the joint venture agreement.
(9)In September 2023, following a UCC foreclosure, the Company converted its previous mezzanine debt investments in the fee interest at 625 Madison Avenue to a 90.43% ownership interest. See Note 5, "Debt and Preferred Equity Investments."
Disposition of Joint Venture Interests or Properties
The following table summarizes the investments in unconsolidated joint ventures sold during the nine months ended September 30, 2023:
PropertyOwnership Interest DisposedDisposition DateGross Asset Valuation (in millions)
Loss on Sale (in millions) (1)
121 Greene Street50.0%February 2023$14.0 $(0.3)
(1)Represents the Company's share of the loss.
Schedule of first mortgage notes payable collateralized by the respective joint venture properties and assignment of leases The mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases as of September 30, 2023 and December 31, 2022, respectively, are as follows (dollars in thousands):
Property
Economic
Interest (1)
Maturity
Date
Final Maturity Date (2)
Interest
Rate (3)
September 30, 2023December 31, 2022
Fixed Rate Debt:
717 Fifth Avenue10.92 %
   July 2022 (4)
   July 2022 (4)
5.02%$655,328 $655,328 
650 Fifth Avenue50.00 %
October 2023 (6)
January 20245.45%65,000 65,000 
220 East 42nd Street51.00 %June 2024June 20255.86%505,412 510,000 
5 Times Square31.55 %September 2024September 20267.07%434,816 400,000 
10 East 53rd Street55.00 %February 2025February 20255.45%220,000 220,000 
1515 Broadway56.87 %March 2025March 20253.93%767,179 782,321 
115 Spring Street51.00 %March 2025March 20255.50%65,550 — 
450 Park Avenue25.10 %June 2025June 20276.10%267,000 267,000 
11 Madison Avenue60.00 %September 2025September 20253.84%1,400,000 1,400,000 
One Madison Avenue (5)
25.50 %November 2025November 20263.59%662,663 467,008 
800 Third Avenue60.52 %February 2026February 20263.37%177,000 177,000 
919 Third Avenue51.00 %April 2026April 20286.11%500,000 500,000 
625 Madison Avenue90.43 %December 2026December 20266.05%223,200 — 
245 Park Avenue50.10 %June 2027June 20274.30%1,768,000 — 
Worldwide Plaza24.95 %November 2027November 20273.98%1,200,000 1,200,000 
One Vanderbilt Avenue71.01 %July 2031July 20312.95%3,000,000 3,000,000 
280 Park Avenue1,200,000 
21 East 66th Street— 12,000 
Total fixed rate debt $11,911,148 $10,855,657 
Floating Rate Debt:
11 West 34th Street30.00 %
February 2023 (4)
February 2023 (4)
L+1.45%$23,000 $23,000 
650 Fifth Avenue50.00 %
October 2023 (6)
January 2024S+2.25%210,000 210,000 
2 Herald Square51.00 %November 2023November 2023S+2.06%182,500 182,500 
100 Park Avenue49.90 %December 2023December 2025S+2.36%360,000 360,000 
15 Beekman (7)
20.00 %January 2024July 2025S+1.61%123,168 86,738 
1552 Broadway50.00 %February 2024February 2024S+2.75%193,132 193,132 
280 Park Avenue50.00 %September 2024September 2024S+2.03%1,200,000 — 
5 Times Square31.55 %September 2024September 2026S+5.69%604,598 495,924 
21 East 66th Street32.28 %April 2027April 2027S+1.75%12,000 — 
21 East 66th Street32.28 %June 2033June 2033T+2.75%555 586 
115 Spring Street— 65,550 
121 Greene Street— 12,550 
Total floating rate debt$2,908,953 $1,629,980 
Total joint venture mortgages and other loans payable$14,820,101 $12,485,637 
Deferred financing costs, net(112,175)(136,683)
Total joint venture mortgages and other loans payable, net$14,707,926 $12,348,954 
(1)Economic interest represents the Company's interests in the joint venture as of September 30, 2023. 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)Reflects exercise of all available options. The ability to exercise extension options may be subject to certain conditions, including meeting tests based on the operating performance of the property.
(3)Interest rates as of September 30, 2023, taking into account interest rate hedges in effect during the period. Floating rate debt is presented with the stated spread over Term SOFR ("S") or 1-year Treasury ("T").
(4)As of the date of this filing, the loan is in maturity default. The Company is in discussions with the lender on a resolution.
(5)The loan is a $1.25 billion construction facility with an initial term of five years with one, one year extension option. Advances under the loan are subject to costs incurred. In conjunction with the loan, the Company provided partial guarantees for interest and principal payments, the amounts of which are based on certain construction milestones and operating metrics. In July 2023, the facility was modified, which will allow the partnership to utilize the final tranche of the facility for an expanded range of uses, including additional amenities funded by construction cost savings and for hedging activities in contemplation of a permanent financing.
(6)As of the date of this filing, the Company has submitted its request to extend the maturity date of the loan in accordance with the loan agreement. While the Company believes the extension will be granted, the lender group is currently unable to respond given the turmoil in the Middle East.
(7)This loan is a $125.0 million construction facility. Advances under the loan are subject to costs incurred.
Schedule of combined balance sheets for the unconsolidated joint ventures
The combined balance sheets for the unconsolidated joint ventures, at September 30, 2023 and December 31, 2022 are as follows (in thousands):
September 30, 2023December 31, 2022
Assets (1)
Commercial real estate property, net$18,667,334 $15,989,642 
Cash and restricted cash691,274 709,299 
Tenant and other receivables, related party receivables, and deferred rents receivable668,137 601,552 
Other assets2,656,613 2,551,426 
Total assets$22,683,358 $19,851,919 
Liabilities and equity (1)
Mortgages and other loans payable, net$14,707,926 $12,348,954 
Deferred revenue1,156,816 1,077,901 
Lease liabilities993,041 1,000,356 
Other liabilities444,208 456,537 
Equity5,381,367 4,968,171 
Total liabilities and equity$22,683,358 $19,851,919 
Company's investments in unconsolidated joint ventures$3,152,752 $3,190,137 
(1)At September 30, 2023, $537.4 million of net unamortized basis differences between the amount at which our investments are carried and our share of equity in net assets of the underlying property will be amortized through equity in net income (loss) from unconsolidated joint ventures over the remaining life of the underlying items having given rise to the differences.
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 three and nine months ended September 30, 2023 and 2022, are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Total revenues$407,148 $330,705 $1,140,889 $997,670 
Operating expenses63,081 59,841 183,825 173,327 
Real estate taxes78,564 66,594 210,428 186,710 
Operating lease rent7,307 6,616 21,746 19,465 
Interest expense, net of interest income162,897 112,747 421,528 305,977 
Amortization of deferred financing costs6,897 7,116 21,140 20,568 
Depreciation and amortization138,199 116,511 380,867 343,183 
Total expenses456,945 369,425 1,239,534 1,049,230 
Loss on early extinguishment of debt— — — (467)
Net loss before gain (loss) on sale$(49,797)$(38,720)$(98,645)$(52,027)
Company's equity in net loss from unconsolidated joint ventures$(15,126)$(21,997)$(44,470)$(31,262)