Investment in Unconsolidated Ventures

We participate in real estate ventures for the purpose of acquiring and developing residential, multifamily and mixed-use communities in which we may or may not have a controlling financial interest. U.S. GAAP requires consolidation of Variable Interest Entities (VIEs) in which an enterprise has a controlling financial interest and is the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance and (b) the obligation to absorb the VIE losses and right to receive benefits that are significant to the VIE. We examine specific criteria and use judgment when determining whether a venture is a VIE and whether we are the primary beneficiary. We perform this review initially at the time we enter into venture agreements and reassess upon reconsideration events.

At year-end 2016, we had ownership interests in 16 ventures that we accounted for using the equity method, none of which are a VIE.

In 2016, we sold our interest in FMF Peakview LLC (360⁰), a 304-unit multifamily joint venture near Denver, generating $13,917,000 in net proceeds and recognized a gain of $10,363,000 which is included in gain on sale of assets.

Combined summarized balance sheet information for our ventures accounted for using the equity method follows:



	Venture Assets				Venture Borrowings ^(a)				Venture Equity				Our Investment
	At Year-End
	2016		2015		2016		2015		2016		2015		2016		2015
	(In thousands)
242, LLC ^(b)	$	26,503	$	26,687	$	1,107	$	—	$	23,136	$	24,877	$	10,934	$	11,766
CL Ashton Woods, LP ^(c)	2,653		7,654		—		—		2,198		6,084		1,107		3,615
CL Realty, LLC	8,048		7,872		—		—		7,899		7,662		3,950		3,831
CREA FMF Nashville LLC ^(b)	56,081		57,820		37,446		50,845		17,091		4,291		4,923		3,820
Elan 99, LLC	49,652		34,192		36,238		14,587		13,100		15,838		11,790		14,255
FMF Littleton LLC	70,282		52,376		44,446		22,347		23,798		24,370		6,128		6,270
FMF Peakview LLC	—		48,869		—		30,485		—		16,828		—		3,447
FOR/SR Forsyth LLC	10,672		6,500		1,568		—		8,990		6,500		8,091		5,850
HM Stonewall Estates, Ltd ^(c)	852		2,842		—		—		852		2,842		477		1,294
LM Land Holdings, LP ^(c)	25,538		31,984		3,477		7,728		20,945		22,751		9,685		9,664
MRECV DT Holdings LLC	4,155		4,215		—		—		4,144		4,215		3,729		3,807
MRECV Edelweiss LLC	3,484		2,237		—		—		3,484		2,237		3,358		2,029
MRECV Juniper Ridge LLC	4,156		3,006		—		—		4,156		3,006		3,741		2,730
MRECV Meadow Crossing II LLC	2,492		728		—		—		2,491		728		2,242		655
Miramonte Boulder Pass, LLC	10,738		12,627		4,006		5,869		5,265		5,474		5,330		5,349
Temco Associates, LLC	4,368		5,284		—		—		4,253		5,113		2,126		2,557
Other ventures (d)	—		4,174		—		2,242		—		1,922		—		1,514
	$	279,674	$	309,067	$	128,288	$	134,103	$	141,802	$	154,738	$	77,611	$	82,453

Combined summarized income statement information for our ventures accounted for using the equity method follows:



	Revenues						Earnings (Loss)									Our Share of Earnings (Loss)
	For the Year
	2016		2015		2014		2016			2015			2014			2016			2015			2014
	(In thousands)
242, LLC ^(b)	$	5,835	$	20,995	$	5,612	$	1,259		$	9,588		$	2,951		$	668		$	4,919		$	1,514
CL Ashton Woods, LP ^(c)	2,870		9,820		5,431		914			3,881			1,748			1,332			5,000			2,471
CL Realty, LLC	567		856		1,573		237			424			1,068			119			212			534
CREA FMF Nashville LLC ^{(b) (d)}	4,955		1,227		—		(1,420		)	(1,696		)	(163		)	1,103			(1,696		)	(163		)
Elan 99, LLC	1,392		—		—		(2,739		)	(49		)	(87		)	(2,465		)	(44		)	(78		)
FMF Littleton LLC	3,116		120		—		(571		)	(367		)	(239		)	(143		)	(92		)	(60		)
FMF Peakview LLC	939		2,057		4		(248		)	(1,116		)	(410		)	(50		)	(223		)	(83		)
FOR/SR Forsyth LLC	—		—				(65		)	—						(58		)	—
HM Stonewall Estates, Ltd. ^(c)	2,112		3,990		1,728		832			1,881			613			361			952			248
LM Land Holdings, LP ^(c)	10,001		10,956		21,980		7,288			8,251			15,520			2,458			3,342			4,827
MRECV DT Holdings LLC	495		—				477			167						429			—
MRECV Edelweiss LLC	416		—				409			151						368			137
MRECV Juniper Ridge LLC	379		—				380			106						342			—
MRECV Meadow Crossing II LLC	267		—		—		220			—			—			198			—			—
Miramonte Boulder Pass, LLC	4,923		—				(399		)	(250		)				(200		)	(125		)
PSW Communities, LP	—		29,986		—		—			2,688			(86		)	—			1,169			(76		)
TEMCO Associates, LLC	1,344		9,485		2,155		440			2,358			494			220			1,179			247
Other ventures	6,519		36,237		3,960		2,105			33,303			3,879			1,441			1,278			(696		)
	$	46,130	$	125,729	$	42,443	$	9,119		$	59,320		$	25,288		$	6,123		$	16,008		$	8,685

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^(a)	Total includes current maturities of $89,756,000 at year-end 2016, of which $78,557,000 is non-recourse to us, and $39,590,000 at year-end 2015, of which $29,691,000 is non-recourse to us.


^(b)	Includes unamortized deferred gains on real estate contributed by us to ventures. We recognize deferred gains as income as real estate is sold to third parties. Deferred gains of $1,457,000 are reflected as a reduction to our investment in unconsolidated ventures at year-end 2016.

^(c)

Includes unrecognized basis difference of $259,000 which is reflected as an increase of our investment in unconsolidated ventures at year-end 2016. This difference between estimated fair value of the equity investment and our capital account within the respective ventures at closing will be accreted as income or expense over the life of the investment and included in our share of earnings (loss) from the respective ventures.


^(d)	Our share of venture earnings in 2016 includes reallocation of prior year cumulative losses incurred by the venture as a result of equity contribution by the venture partner in 2016.

In 2016, we invested $6,089,000 in these ventures and received $13,419,000 in distributions; in 2015, we invested $26,349,000 in these ventures and received $24,909,000 in distributions; and in 2014, we invested $14,692,000 in these ventures and received $7,518,000 in distributions. Distributions include both return of investments and distributions of earnings.

We provide construction and development services for some of these ventures for which we receive fees. Fees for these services were $2,466,000 in 2016, $1,856,000 in 2015 and $2,275,000 in 2014, and are included in real estate revenues.