Investments in and Advances to Unconsolidated Joint Ventures

As of September 30, 2012, our investments in and advances to unconsolidated joint ventures in the condensed consolidated balance sheets were composed of the following:



				Investment Balance
Joint Venture ⁽¹⁾	Number of Properties	Location	Ownership	September 30, 2012		December 31, 2011
				(In thousands)
Investments in unconsolidated joint ventures:
GRI-EQY I, LLC ⁽²⁾	10	GA, SC, FL	10.0%	$	8,355	$	7,705
G&I Investment South Florida Portfolio, LLC	3	FL	20.0%	3,504		3,215
Madison 2260 Realty LLC	1	NY	8.6%	634		1,066
Madison 1235 Realty LLC	1	NY	20.1%	1,000		1,000
Talega Village Center JV, LLC ⁽³⁾	1	CA	50.5%	3,041		3,620
Vernola Marketplace JV, LLC ⁽³⁾	1	CA	50.5%	7,180		7,433
Parnassus Heights Medical Center	1	CA	50.0%	20,459		13,695
Equity One JV Portfolio, LLC ⁽⁴⁾	3	FL, MA	30.0%	16,773		11,393
Total				60,946		49,127
Advances to unconsolidated joint ventures				503		1,031
				$	61,449	$	50,158

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⁽¹⁾ With the exception of the Madison 2260 Realty LLC and Madison 1235 Realty LLC joint ventures, which are accounted for under the cost method, all unconsolidated joint ventures are accounted for under the equity method.

⁽²⁾ The investment balance as of September 30, 2012 and December 31, 2011 is presented net of deferred gains of $3.3 million for both periods associated with the disposition of assets by us to the joint venture.

⁽³⁾ Our effective interest is 48% when considering the 5% noncontrolling interest held by Vestar Development Company.

⁽⁴⁾ The investment balance as of September 30, 2012 and December 31, 2011 is presented net of a deferred gain of approximately $404,000 for both periods associated with the disposition of assets by us to the joint venture in 2011.

Equity in income of unconsolidated joint ventures totaled $469,000 and $129,000 for the three and nine months ended September 30, 2012, respectively, and totaled $4.4 million and $4.7 million, respectively, for the same periods in 2011. Management fees and leasing fees paid to us associated with these joint ventures, which are included in management and leasing services revenue in the accompanying condensed consolidated statements of operations, totaled approximately $497,000 and $1.8 million for the three and nine months ended September 30, 2012, respectively, and $442,000 and $1.5 million for the three and nine months ended September 30, 2011, respectively.

At September 30, 2012 and December 31, 2011, the aggregate carrying amount of our unconsolidated joint venture debt was $223.9 million and $249.9 million, respectively, of which our aggregate proportionate share was $45.1 million and $54.5 million, respectively. During 2012, we made investments of $7.5 million in two of our unconsolidated joint ventures in connection with repayments of indebtedness by those joint ventures totaling $21.1 million.

New York Common Retirement Fund Joint Venture

In May 2011, we sold two operating properties, Country Walk Plaza in Miami, Florida and Veranda Shoppes in Plantation, Florida to Equity One JV Portfolio, LLC, a newly formed joint venture between us and the New York State Common Retirement Fund (“NYCRF”). NYCRF holds a 70% interest in the joint venture and we own a 30% interest. We perform the day to day accounting and property management functions for the joint venture and, as such, earn a management fee for the services provided. Our ownership interest in this joint venture is accounted for under the equity method. In December 2011, the joint venture purchased an operating property located in Framingham, Massachusetts, for an aggregate purchase price of $23.2 million, which included the assumption of $10.4 million of mortgage debt.

On January 26, 2012, our NYCRF joint venture made an $18.5 million mortgage loan (the “JV Loan”) secured by a newly developed shopping center. The JV Loan bears interest at 6.25%, has a maturity of nine years and is pari passu with a $71.4 million mortgage loan (the “Third Party Loan”) provided by a third party lender. In addition to the JV Loan, we provided a mezzanine loan (the “Mezzanine Loan”) indirectly secured by the shopping center in the amount of $19.3 million. The Mezzanine Loan bears interest at 10.0% and has a maturity of nine years. During certain periods prior to January 26, 2014, the joint venture has an option to purchase the shopping center and during certain different periods the borrower has a put option to sell the shopping center to the joint venture, in each case for a formula based purchase price currently projected to be approximately $143.0 million, which is comprised of a predetermined fixed amount of $128.4 million and a variable amount to be derived from the minimum rent associated with a portion of the shopping center under development. In the event it acquires the shopping center, the joint venture is required to immediately repay the Mezzanine Loan. If certain events of default occur under the Third Party Loan, the JV Loan will become subordinate to such Third Party Loan. In that case, we will be obligated to purchase the JV Loan at par plus accrued interest. In addition, if the put and call options expire unexercised, the JV Loan will become subordinate to the Third Party Loan and we will be required to purchase the JV Loan at par plus accrued interest. In October 2012, our NYCRF joint venture submitted a purchase option notice to acquire the shopping center and we expect the Mezzanine Loan of $19.3 million to be repaid in December 2012 in connection with the joint venture's purchase of the property. We have determined that the entities holding direct and indirect interests in the shopping center are VIEs. However, in relation to the VIE in which we hold a variable interest, we are not the primary beneficiary as we do not have the power to direct the activities that most significantly impact the VIE’s economic performance.