Investment in Consolidated and Unconsolidated Entities

12 Months Ended

Dec. 31, 2019

Investment in Partially Owned Entities [Abstract]

Investment in Consolidated and Unconsolidated Entities

Consolidated Entities

As of December 31, 2019, the Company had no VIEs. At December 31, 2018, Sandy Plains Centre was the Company's only VIE through an active Reverse 1031 Exchange. The liabilities of the VIE are not recourse to the Company, and the assets must be used first to settle obligations of the VIE. The following table reflects the assets, liabilities and net assets of the Company's VIE as of December 31, 2018.



	December 31, 2018
Net investment properties	$	39,634
Other assets	4,457
Total assets	44,091
Liabilities	385
Net assets	$	43,706

Unconsolidated Entities

The entities listed in the table below are or were owned by the Company and other unaffiliated parties in joint ventures. Net income, distributions and capital transactions for these entities are or was allocated to the Company and its joint venture partners in accordance with the respective partnership agreements.

The Company analyzed the joint venture agreements and determined that the joint ventures were not VIEs. The Company also considered the joint venture partners' participating rights under the joint venture agreements and determined that the joint venture partners have the ability to participate in major decisions, which equates to shared decision making. Accordingly, the Company has significant influence but does not control the joint ventures. Therefore, these joint ventures were not consolidated

by the Company, and the equity method of accounting was used to account for these investments. Under the equity method of accounting, the net equity investment of the Company and the Company's share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and comprehensive income.



		Current Ownership %	Carrying Value of Investment as of December 31,
Entity	Description	Current Ownership %	2019		2018
IAGM Retail Fund I, LLC	Multi-tenant retail shopping centers	55%	$	118,861	$	126,195
Downtown Railyard Venture, LLC	Land development	—%	—		30,049
Other unconsolidated entities	Various real estate investments	—%	—		(112		)
			$	118,861	$	156,132

IAGM

On April 17, 2013, the Company entered into a joint venture, IAGM, with PGGM for the purpose of acquiring, owning, managing, supervising and disposing of retail properties and sharing in the profits and losses from those retail properties and their activities. The Company contributed 14 properties to IAGM during the year ended December 31, 2013, and treated the contributions as partial sales under FASB Topic 360-20, "Property, Plant and Equipment - Real Estate Sales." The resulting deferred aggregate gain of $15,625 was reflected as a basis adjustment and subsequently amortized over 30 years, consistent with the depreciation period of the investee's underlying assets. The Company's adoption of ASU No. 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets on January 1, 2018, resulted in the remaining $12,756 of the aforementioned deferred gain being recognized through beginning distributions in excess of accumulated net income.

During the year ended December 31, 2019, IAGM disposed of Rockwell Plaza, a 255,000 square foot retail property, for a gross disposition price of $20,500 and recognized a provision for asset impairment of $1,443 and a loss on sale of $559. The Company's share of IAGM's provision for asset impairment was $794, and its share of the loss on sale was $307. Proceeds from the sale were used to extinguish the related $16,250 non-recourse mortgage loan.

During the year ended December 31, 2018, IAGM recognized a provision for asset impairment of $3,673 on three retail properties and a loss on sale of $4,135 on two retail properties. For the year ended December 31, 2018, the Company's share of IAGM's provision for asset impairment and loss on sale was $2,020 and $2,274, respectively.

Downtown Railyard Ventures, LLC

On September 30, 2015, the Company was admitted as a member to Downtown Railyard Venture, LLC ("DRV"), which was a joint venture established for the purpose of developing and selling a land development in Sacramento, California. The joint venture partner was the developer and managing member of DRV, responsible for the day-to-day activities and earned fees for managing the venture. During the year ended December 31, 2018, the Company recorded an other-than-temporary impairment of $29,933 on DRV due to a reduction in the expected hold period, thereby reducing the investment to an estimated fair value that the Company believed would be most probable of realization if the investment was liquidated. On June 24, 2019, the Company liquidated all interests in DRV in exchange for $30,000 of cash consideration. As a result of the other-than-temporary impairment recorded in 2018, the liquidation of interests resulted in no gain or loss being recognized on the transaction. Upon liquidation, the Company has no continuing involvement with DRV.

During the year ended December 31, 2017, the Company received a final distribution from one unconsolidated entity of $366, which reduced the Company's investment in the unconsolidated entity to zero. No gain or loss was recognized as part of the transaction.

Combined Financial Information

The following tables present the combined financial information for the Company’s investments in unconsolidated entities.



	As of
	December 31, 2019		December 31, 2018
	(unaudited)		(unaudited)
Assets:
Real estate assets, net of accumulated depreciation	$	425,585	$	494,583
Other assets	66,437		103,565
Total assets	492,022		598,148
Liabilities and equity:
Mortgage debt, net	256,732		272,629
Other liabilities	20,765		42,569
Equity	214,525		282,950
Total liabilities and equity	492,022		598,148
Company's share of equity	118,861		185,814
Outside basis difference (a)	—		(29,682		)
Carrying value of investments in unconsolidated entities	$	118,861	$	156,132


(a)	The outside basis difference principally related to the DRV impairment recorded in 2018.



	Year ended December 31,
	2019			2018			2017
	(unaudited)			(unaudited)			(unaudited)
Revenues	$	53,464		$	58,322		$	62,367
Expenses:
Interest expense and loan cost amortization	10,882			13,205			13,419
Depreciation and amortization	20,135			21,001			26,860
Operating, general and administrative expenses	18,670			19,732			22,304
Provision for asset impairment	1,443			3,673			4,745
Total expenses	51,130			57,611			67,328
Income (loss) before sale of real estate and debt extinguishments	2,334			711			(4,961		)
(Loss) gain on sale of real estate	(5,540		)	(4,123		)	434
Loss on debt extinguishment	—			(20		)	—
Net loss	$	(3,206	)	$	(3,432	)	$	(4,527	)

Company's share of net loss, net of excess basis depreciation of $0, $0, and $520, respectively	$	(3,446	)	$	(1,870	)	$	(1,930	)
Distributions from unconsolidated entities in excess of the investments' carrying value	—			410			1,126
Impairment of investment in unconsolidated entity	—			(29,933		)	—
Outside basis adjustment for investee's sale of real estate	4,403			—			—
Equity in earnings (losses) and (impairment), net, of unconsolidated entities	$	957		$	(31,393	)	$	(804	)

The following table presents the scheduled maturities of IAGM's total third party mortgage debt of $258,827 as of December 31, 2019, for each of the next five years, and thereafter:



	Maturities during the year ending December 31,
	2020		2021		2022		2023		2024		Thereafter		Total
Mortgages payable	$	14,872	$	23,150	$	—	$	180,125	$	—	$	40,680	$	258,827

As of December 31, 2019 and 2018, none of IAGM's mortgages payable are recourse to the Company. It is anticipated that the joint venture will be able to repay, refinance or extend all of its debt on a timely basis. On January 22, 2020, IAGM prepaid a $14,872 mortgage payable.

On November 2, 2018, IAGM entered into a senior secured term loan facility of $152,000 to refinance its mortgages payable maturing in 2018. The senior secured term loan facility matures in November 2023 and contains two twelve-month extension options that IAGM may exercise upon payment of an extension fee equal to 0.10% of the total commitment amount on the first day of the extension term and subject to certain other conditions. The senior secured term loan facility bears interest at a rate equal to the London Inter-bank Offered Rate ("LIBOR") daily floating rate plus 1.55% and requires the maintenance of certain financial covenants.