Investment in Unconsolidated Joint Venture

On October 30, 2013, the Company purchased a 48.9% equity interest in WWP Holdings, LLC ("Worldwide Plaza") for a contract purchase price of $220.1 million. The purchase price reflected an agreed value for Worldwide Plaza of $1,325.0 million less $875.0 million of debt on the property. The debt on the property has a weighted average interest rate of 4.6% and matures in March 2023. The Company accounts for the investment in Worldwide Plaza using the equity method of accounting, because the Company exercises significant influence over, but does not control the entity. As of March 31, 2014, the carrying value of the Company's investment in Worldwide Plaza was $229.1 million.

Pursuant to the terms of the membership agreement relating to the Company’s purchase of the 48.9% equity interest in Worldwide Plaza, the Company retains an option to purchase the balance of the equity interest in Worldwide Plaza beginning 38 months following the closing of the acquisition at an agreed value of $1.4 billion, subject to certain adjustments, including adjustments for certain loans that are outstanding at the time of any exercise and adjustments for the percentage equity interest being acquired.

At acquisition, the Company's investment in Worldwide Plaza exceeded the Company's share of the book value of the net assets of Worldwide Plaza by $260.6 million. This basis difference resulted from the excess of the Company's purchase price for the interest in the Worldwide Plaza over the book value of Worldwide Plaza's net assets. Substantially all of this basis difference was allocated, based on the Company's estimates of the fair values of Worldwide Plaza's assets and liabilities, to real estate (land and buildings). The Company amortizes the basis difference over the anticipated useful lives of the underlying tangible and intangible assets acquired and liabilities assumed.

During the three months ended March 31, 2014, $3.2 million was recorded in depreciation and amortization expense in the consolidated statements of operations and comprehensive loss relating to the amortization of the basis difference. The basis difference related to the land will be recognized upon disposition of the Company's investment. During the three months ended March 31, 2014, the Company recorded $1.3 million of income related to its investment in Worldwide Plaza, which represents $3.9 million of preferred distributions earned, net of the Company's pro-rata share of Worldwide Plaza's net loss during the same period. Worldwide Plaza's net loss during the period is adjusted for the preferred distribution to the Company and distributions to the Company's partner in the joint venture. The income related to the Company's investment in Worldwide Plaza is included in other income (expenses) on the consolidated statements of operations and comprehensive loss.

The amounts reflected in the following tables (except for the Company’s share of equity and income) are based on the historical financial information of Worldwide Plaza. The Company does not record losses of the joint venture in excess of its investment balance unless the Company is liable for the obligations of the joint venture or is otherwise committed to provide financial support to the joint venture.

The condensed balance sheets as of March 31, 2014 and December 31, 2013 for Worldwide Plaza are as follows:



(In thousands)	March 31, 2014			December 31, 2013
Real estate assets, at cost	$	696,426		$	696,342
Less accumulated depreciation and amortization	(82,635		)	(77,919		)
Total real estate assets, net	613,791			618,423
Other assets	247,705			248,048
Total assets	$	861,496		$	866,471

Debt	$	875,000		$	875,000
Other liabilities	10,294			9,923
Total liabilities	885,294			884,923
Deficit	(23,798		)	(18,452		)
Total liabilities and deficit	$	861,496		$	866,471

Company's basis	$	229,127		$	234,774

The condensed statement of operations for the three months ended March 31, 2014 for Worldwide Plaza is as follows:



	Three Months Ended
(In thousands)	March 31, 2014
Rental income	$	27,655
Other revenue	1,215
Total revenue	28,870
Operating expenses:
Operating expense	11,513
Depreciation and amortization	6,368
Total operating expenses	17,881
Operating income	10,989
Interest expense	(9,882		)
Net income	1,107
Company's preferred distribution	(3,851		)
Joint venture partner distribution	(2,560		)
Net loss to members	$	(5,304	)

Company's preferred distribution	$	3,851
Company's share of net loss from Worldwide Plaza	(2,594		)
Company's income from Worldwide Plaza	$	1,257