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. As of June 30, 2014, the Company's pro-rata portion of debt on Worldwide Plaza was $427.9 million. 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 June 30, 2014, the carrying value of the Company's investment in Worldwide Plaza was $228.8 million.

Pursuant to the terms of the membership agreement governing 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 and six months ended June 30, 2014, the Company recorded $3.2 million and $6.5 million of depreciation and amortization expense, respectively, in the consolidated statements of operations and comprehensive income (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 and six months ended June 30, 2014, the Company recorded $4.2 million and $5.4 million of income, respectively, related to its investment in Worldwide Plaza, which includes $3.9 million and $7.7 million of preferred distributions earned, respectively, net of the Company's pro-rata share of Worldwide Plaza's net loss during the same period. 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 income (loss).

The amounts reflected in the following tables (except for the Company’s share of equity and income) are based on the 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 June 30, 2014 and December 31, 2013 for Worldwide Plaza are as follows:



(In thousands)	June 30, 2014			December 31, 2013
Real estate assets, at cost	$	697,643		$	696,342
Less accumulated depreciation and amortization	(87,351		)	(77,919		)
Total real estate assets, net	610,292			618,423
Other assets	253,620			248,048
Total assets	$	863,912		$	866,471

Debt	$	875,000		$	875,000
Other liabilities	13,129			9,923
Total liabilities	888,129			884,923
Deficit	(24,217		)	(18,452		)
Total liabilities and deficit	$	863,912		$	866,471

Company's basis	$	228,834		$	234,774

The condensed statement of operations for the three and six months ended June 30, 2014 for Worldwide Plaza is as follows:



	Three Months Ended			Six Months Ended
(In thousands)	June 30, 2014			June 30, 2014
Rental income	$	27,739		$	55,394
Other revenue	1,229			2,444
Total revenue	28,968			57,838
Operating expenses:
Operating expense	10,779			22,292
Depreciation and amortization	6,260			12,628
Total operating expenses	17,039			34,920
Operating income	11,929			22,918
Interest expense	(9,992		)	(19,874		)
Net income	1,937			3,044
Company's preferred distribution	(1,334		)	(7,745		)
Net loss to members	$	603		$	(4,701	)

Company's preferred distribution	$	3,894		$	7,745
Company's share of net loss from Worldwide Plaza	(957		)	(2,299		)
Reallocation of net loss to members	1,252			—
Company's income from Worldwide Plaza	$	4,189		$	5,446