XML 19 R7.htm IDEA: XBRL DOCUMENT v3.3.1.900
Business and Organization
12 Months Ended
Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business and Organization
Business
Behringer Harvard Opportunity REIT I, Inc. (which may be referred to as the "Company," "we," "us," or "our") was incorporated in November 2004 as a Maryland corporation and has elected to be taxed, and currently qualifies, as a real estate investment trust ("REIT") for federal income tax purposes.
We operate commercial real estate and real estate-related assets located in and outside the United States. With our opportunistic and value-add investment strategy, we have focused generally on acquiring properties with significant possibilities for capital appreciation, such as those requiring development, redevelopment, or repositioning, or those located in markets and submarkets with higher volatility, lower barriers to entry, and high growth potential. We have acquired a wide variety of properties, including office, retail, hospitality, recreation and leisure, multifamily, industrial, and other properties. We have purchased existing and newly constructed properties and properties under development or construction. As of December 31, 2015, we wholly owned four properties and consolidated three properties through investments in joint ventures, including our Las Colinas Commons office building, located in Irving, Texas, which is classified as real estate held for sale on our consolidated balance sheet at December 31, 2015. We sold Las Colinas Commons on February 2, 2016. In addition, we have a noncontrolling, unconsolidated ownership interest in a joint venture consisting of 18 properties that is accounted for using the equity method.
In September 2007, we made mezzanine loans to the owner and developer of Alexan Black Mountain Apartments, a multifamily community located in Henderson, Nevada, and obtained an option to purchase the property after completion of construction. On August 18, 2015, we entered into a letter agreement with the owner pursuant to which we consented to the sale of Alexan Black Mountain Apartments to a third party for an amount less than the senior mortgage loan on the property and released our option rights in exchange for a payment of less than $0.1 million. The sale of the property closed on August 19, 2015. Our mezzanine loan, which was fully reserved, was retired and the proceeds were recorded as other income.
Substantially all of our business is conducted through Behringer Harvard Opportunity OP I, LP, a Texas limited partnership organized in November 2004 (the "Operating Partnership"), or its subsidiaries. Our wholly owned subsidiary, BHO, Inc., a Delaware corporation, owns less than a 0.1% interest in the Operating Partnership as its sole general partner. The remaining interest of the Operating Partnership is held as a limited partnership interest by our wholly owned subsidiary, BHO Business Trust, a Maryland business trust.
We are externally managed and advised by Behringer Harvard Opportunity Advisors I, LLC, (the "Advisor"), a Texas limited liability company. The Advisor is responsible for managing our day-to-day affairs and providing services that are essential to us, including asset disposition decisions and property management and leasing services. Our investment properties are located in Colorado, Missouri, Texas, The Commonwealth of The Bahamas, the Czech Republic, and Poland.
We have entered our disposition phase and are currently considering liquidity options for our stockholders. Therefore, we are not actively seeking to purchase additional properties. We will seek stockholder approval prior to liquidating our entire portfolio.
Presentation of Financial Statements and Going Concern
Our financial statements are presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business as we proceed through our disposition phase. As is usual for opportunity-style real estate investment programs, we are structured as a finite life entity, and have entered the final phase of operations. This phase includes selling our assets, retiring our liabilities, and distributing net proceeds to stockholders. We have experienced significant losses and may generate negative cash flows as mortgage note obligations and expenses exceed revenues. If we are unable to sell a property when we determine to do so, it could have a significant adverse effect on our cash flows that are necessary to meet our mortgage obligations and our ability to satisfy our other liabilities in the normal course of business.
Our ability to continue as a going concern is dependent upon our ability to sell real estate investments, to pay down debt as it matures if extensions or new financings are unavailable, and our ability to fund ongoing costs of our Company, including our development and operating properties.