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Investments in Unconsolidated Joint Ventures
 9 Months Ended
Sep. 30, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Unconsolidated Joint Ventures Investments in Unconsolidated Joint Ventures
We have investments in several real estate joint ventures with various partners. As of September 30, 2024, the book value of these investments was $2.9 billion, net of investments with negative book values totaling $179.1 million for which we have an implicit commitment to fund future capital needs.
As of September 30, 2024, 800 Third Avenue and our preferred equity investment in 625 Madison Avenue are VIEs in which we are not the primary beneficiary. As of December 31, 2023, 800 Third Avenue and 625 Madison Avenue were VIEs in which we are not the primary beneficiary. Our net equity investment in these VIEs was $261.0 million and $437.9 million as of September 30, 2024 and December 31, 2023, respectively. Our maximum loss is limited to the amount of our equity investment in these VIEs. See the "Principles of Consolidation" section of Note 2, "Significant Accounting Policies." All other investments below are voting interest entities. As we do not control, but have significant influence over 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, 2024:
PropertyPartner
Ownership
Interest (1)
Economic
Interest (1)
Unaudited Approximate Square Feet
100 Park AvenuePrudential Real Estate Investors49.90%49.90%834,000 
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 Street (2)
Private Investor / Wharton Properties30.00%30.00%17,150 
280 Park AvenueVornado Realty Trust50.00%50.00%1,219,158 
1552-1560 Broadway (2) (3)
Wharton Properties50.00%50.00%57,718 
650 Fifth Avenue (2) (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 Plaza (2)
RXR Realty / New York REIT24.95%24.95%2,048,725 
1515 BroadwayAllianz Real Estate of America56.87%56.87%1,750,000 
2 Herald Square (2) (5)
Israeli Institutional Investor95.00%95.00%369,000 
115 Spring Street (2)
Private Investor51.00%51.00%5,218 
15 Beekman (6)
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 (7)
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 (8)
Korean Institutional Investor / Israeli Institutional Investor
50.10%25.10%337,000 
5 Times Square (2)
RXR Realty led investment group31.55%31.55%1,131,735 
245 Park AvenueU.S. Affiliate of Mori Trust Co., Ltd50.10%50.10%1,782,793 
625 Madison Avenue (9)
Private Investor90.93%90.93%591,123 
(1)Ownership interest and economic interest represent the Company's interests in the joint venture as of September 30, 2024. Changes in ownership or economic interests within the current year are disclosed in the notes below.
(2)Included in the Company's alternative strategy portfolio.
(3)The joint venture owns a long-term leasehold interest in the retail space and certain other spaces at 1560 Broadway, which is adjacent to 1552 Broadway.
(4)The joint venture owns a long-term leasehold interest in the retail space at 650 Fifth Avenue.
(5)In January 2024, the Company closed on the acquisition of interests in the joint venture that owns the leasehold interest for no consideration, which increases the Company's interest in the joint venture to 95.0%.
(6)In 2020, the Company formed a joint venture, which then entered into a long-term sublease with the Company.
(7)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, 2024 and December 31, 2023.
(8)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.
(9)In connection with the sale of the fee ownership interest, the Company, together with its joint venture partner, originated a $235.4 million preferred equity investment in the property with a mandatory redemption date of December 2026. The Company's share, net of unamortized discounts, is $209.9 million with an aggregate weighted average current yield of 8.91% as of September 30, 2024.
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, 2024:
PropertyOwnership Interest SoldDisposition DateGross Asset Valuation (in millions)
Gain (Loss) on Sale (in millions) (1) (2)
717 Fifth Avenue10.92%January 2024$963.0 $24.9 
625 Madison Avenue (3)
90.43%May 2024634.6 (7.6)
(1)Represents the Company's share of the gain.
(2)For the nine months ended September 30, 2024, the gain (loss) on sale is net of $7.8 million of employee compensation recognized in connection with the realization of the investment dispositions. Additionally, amounts do not include adjustments for expenses recorded in subsequent periods.
(3)In connection with the sale of the fee ownership interest, the Company, together with its joint venture partner, originated a $235.4 million preferred equity investment in the property with a mandatory redemption date of December 2026. The Company's share, net of unamortized discounts, is $209.9 million with an aggregate weighted average current yield of 8.91% as of September 30, 2024. Prior to the completion of the sale, the Company recorded a charge of $5.9 million for capital contributions required during the three months ended March 31, 2024 while the investment was under contract, which is included in Depreciable real estate reserves and impairments in the consolidated statements of operations.

Joint Venture Mortgages and Other Loans Payable
We generally finance our joint ventures with non-recourse debt. In certain cases, we may provide guarantees or master leases, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans. The mortgage notes and other loans payable collateralized by the respective joint venture properties and assignment of leases as of September 30, 2024 and December 31, 2023, respectively, are as follows (dollars in thousands):
Principal OutstandingPrincipal Outstanding
EconomicCurrent MaturityFinal Maturity InterestSeptember 30, 2024December 31, 2023
Property
Interest (1)
Date
Date (2)
Rate (3)
GrossSLG ShareGrossSLG Share
Fixed Rate Debt:
650 Fifth Avenue (4)
50.00 %February 2025July 20255.45%$65,000 $32,500 $65,000 $32,500 
1515 Broadway56.87 %March 2025March 20253.93%746,330 424,431 762,002 433,344 
115 Spring Street (4)
51.00 %March 2025March 20255.50%65,550 33,431 65,550 33,431 
450 Park Avenue25.10 %June 2025June 20276.10%282,789 70,980 271,394 68,120 
11 Madison Avenue60.00 %September 2025September 20253.84%1,400,000 840,000 1,400,000 840,000 
One Madison Avenue (5)
25.50 %November 2025November 20267.10%625,567 159,520 733,103 186,941 
15 Beekman20.00 %January 2026January 20285.99%120,000 24,000 — — 
800 Third Avenue60.52 %February 2026February 20263.37%177,000 107,120 177,000 107,120 
919 Third Avenue51.00 %April 2026April 20286.11%500,000 255,000 500,000 255,000 
280 Park Avenue50.00 %September 2026September 20285.84%1,075,000 537,500 — — 
245 Park Avenue50.10 %June 2027June 20274.30%1,768,000 885,768 1,768,000 885,768 
Worldwide Plaza (4)
24.95 %November 2027November 20273.98%1,200,000 299,400 1,200,000 299,400 
220 East 42nd Street51.00 %December 2027December 20276.77%496,412 253,170 505,412 257,760 
One Vanderbilt Avenue71.01 %July 2031July 20312.95%3,000,000 2,130,300 3,000,000 2,130,300 
5 Times Square (4)
— — 477,783 150,740 
625 Madison Avenue— — 199,987 180,848 
10 East 53rd Street— — 220,000 121,000 
717 Fifth Avenue— — 655,328 71,536 
Total fixed rate debt $11,521,648 $6,053,120 $12,000,559 $6,053,808 
Floating Rate Debt:
11 West 34th Street (4)
30.00 %
February 2023 (6)
February 2023 (6)
L+1.45%$23,000 $6,900 $23,000 $6,900 
1552 Broadway (4)
50.00 %
February 2024 (7)
February 2024 (7)
S+2.75%193,133 96,566 193,133 96,567 
650 Fifth Avenue (4)
50.00 %February 2025July 2025S+2.25%210,000 105,000 210,000 105,000 
5 Times Square (4)
31.55 %
September 2024 (8)
September 2026 (8)
S+4.71%1,163,451 367,069 610,010 192,458 
100 Park Avenue49.90 %December 2024December 2025S+2.36%360,000 179,640 360,000 179,640 
One Madison Avenue (5)
25.50 %November 2025November 2026S+3.10%267,143 68,121 — — 
280 Park Avenue— — 1,200,000 600,000 
2 Herald Square— — 182,500 93,075 
15 Beekman— — 124,137 24,827 
Total floating rate debt$2,216,727 $823,296 $2,902,780 $1,298,467 
Total joint venture mortgages and other loans payable$13,738,375 $6,876,416 $14,903,339 $7,352,275 
Deferred financing costs, net(85,064)(47,397)(104,062)(54,865)
Total joint venture mortgages and other loans payable, net$13,653,311 $6,829,019 $14,799,277 $7,297,410 
(1)Economic interest represents the Company's interests in the joint venture as of September 30, 2024. 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 extension options. The ability to exercise extension options may be subject to certain conditions, including the operating performance of the property.
(3)Interest rates as of September 30, 2024, taking into account interest rate hedges at the joint venture. Corporate interest rate hedges are not taken into consideration. Floating rate debt is presented with the stated spread over Term SOFR ("S").
(4)Included in the Company's alternative strategy portfolio.
(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.
(6)The Company's joint venture partner is in discussions with the lender on resolution of the past maturity.
(7)The Company is in discussions with the lender on resolution of the past maturity.
(8)The joint venture has agreed to cooperate with the lender on the past due maturity.
We receive fees for providing management, leasing, construction supervision and asset management services to certain of our joint ventures. We earned $6.1 million and $12.7 million from these services, net of our ownership share of the joint ventures, for the three and nine months ended September 30, 2024, respectively. We earned $3.5 million and $16.3 million from these services, net of our ownership share of the joint ventures, for the three and nine months ended September 30, 2023, 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, 2024 and December 31, 2023 are as follows (in thousands):
September 30, 2024December 31, 2023
Assets (1)
Commercial real estate property, net$16,534,399 $17,561,406 
Cash and restricted cash696,010 656,038 
Tenant and other receivables and deferred rents receivable643,310 673,532 
Debt and preferred equity investments, net231,080 — 
Right-of-use assets925,461 905,934 
Other assets2,452,064 2,584,765 
Total assets$21,482,324 $22,381,675 
Liabilities and equity (1)
Mortgages and other loans payable, net$13,653,311 $14,799,277 
Deferred revenue1,011,333 1,108,180 
Lease liabilities1,011,261 990,276 
Other liabilities499,409 447,705 
Equity5,307,010 5,036,237 
Total liabilities and equity$21,482,324 $22,381,675 
Company's investments in unconsolidated joint ventures$2,871,683 $2,983,313 
(1)At September 30, 2024, $544.1 million of net unamortized basis differences between the carrying value of our investments 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.
The combined statements of operations for the unconsolidated joint ventures, from acquisition date through the three and nine months ended September 30, 2024 and 2023, are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Total revenues$376,949 $407,148 $1,107,295 $1,140,889 
Operating expenses67,104 63,081 192,587 183,825 
Real estate taxes73,686 78,564 222,797 210,428 
Operating lease rent8,487 7,307 25,990 21,746 
Interest expense, net of interest income141,067 162,897 433,117 421,528 
Amortization of deferred financing costs4,487 6,897 14,718 21,140 
Depreciation and amortization137,640 138,199 407,429 380,867 
Total expenses432,471 456,945 1,296,638 1,239,534 
Gain on early extinguishment of debt— — 233,704 — 
Net (loss) income before gain (loss) on sale$(55,522)$(49,797)$44,361 $(98,645)
Company's equity in net (loss) income from unconsolidated joint ventures$(15,428)$(15,126)$100,057 $(44,470)