Investments in Unconsolidated Entities

6 Months Ended

Jun. 30, 2022

Investments in Unconsolidated Entities.

Investments in Unconsolidated Entities

5. Investments in Unconsolidated Entities

See below for a summary of our investments in unconsolidated entities accounted for under the equity method of accounting as presented in our condensed consolidated balance sheets (in thousands):

	Year	Metropolitan			Balance as of		Balance as of
Entity	Entity Formed	Area of Properties	% Ownership			June 30, 2022		December 31, 2021
Digital Core REIT (DCRU)	2021	U.S. / Canada	35	%	$	342,464	$	343,317
Ownership interest in DCRU operating properties	2021	U.S. / Canada	10	%		140,499		144,050
Ascenty	2019	Brazil / Chile / Mexico	51	%		645,184		553,031
Mapletree	2019	Northern Virginia	20	%		166,507		172,465
Mitsubishi	Various	Osaka / Tokyo	50	%		399,786		401,509
Lumen	2012	Hong Kong	50	%		69,144		68,854
Other	Various	U.S. / India / Nigeria	Various			178,965		124,463
Total					$	1,942,549	$	1,807,689

DCREIT – Digital Core REIT is a standalone real estate investment trust publicly-traded on the Singapore Exchange under the ticker symbol “DCRU”. Digital Core REIT owns 10 operating data center properties. The Company’s ownership interest in the units of DCRU, as well as its ownership interest in the operating properties of DCRU are collectively referred to as the Company’s investment in DCREIT. As of June 30, 2022, the Company held 35% of the outstanding DCRU units and separately owned a 10% retained interest in the underlying operating properties. The Company’s 35% interest in DCRU consisted of 392 million units and 390 million units as of June 30, 2022 and December 31, 2021, respectively. Based on the closing price per unit of $0.77 as of June 30, 2022, the fair value of the units the Company owns in DCRU was approximately $302 million. Based on the closing price per unit of $1.16 as of December 31, 2021, the fair value of the units the Company owns in DCRU was approximately $453 million. This value does not include the value of the Company’s 10% interest in the operating properties of DCRU, because the associated ownership interests are not publicly traded. The Company accounts for its investment in DCREIT as an equity method investment (and not at fair value) based on the significant influence it is able to exert on DCREIT. The Company determined that the decline in fair value of the investment in DCRU as compared to the Company’s book basis as of June 30, 2022 was temporary in nature.

Pursuant to contractual agreements with the DCRU and its operating properties, the Company will earn fees for asset and property management services as well as fees for aiding in future acquisition, disposition and development activities. Certain of these fees are payable to the Company in the form of additional units in DCRU or in cash. During the three and six months ended June 30, 2022, the Company earned fees pursuant to these contractual agreements of approximately $2.8 million and $5.1 million, respectively, which is recorded as fee income and other on the condensed consolidated income statement.

Ascenty – The Company’s ownership interest in Ascenty includes an approximate 2% interest held by one of the Company’s non-controlling interest holders. This 2% interest had a carrying value of approximately $22.6 million and $20.9 million as of June 30, 2022 and December 31, 2021, respectively. Ascenty is a variable interest entity (“VIE”) and the Company’s maximum exposure to loss related to this VIE is limited to our equity investment in the entity.

The debt of our unconsolidated entities generally is non-recourse to us, except for customary exceptions pertaining to matters such as intentional misuse of funds, environmental conditions, and material misrepresentations.